In our final installment on what is worrying our nonprofit clients, we have to identify the elephant in the room that is not only ruining Thanksgiving celebrations for years, but also erupting into a serious risk for many types of nonprofits: politics. Political risk has erupted in both salience and severity over the last ten years. Whether it is a government funding decision, a campaign button worn at work, an employee's inflammatory social media post, a board member's public remarks, or funding or political directions from a change of administration, political risk can quickly become a crisis affecting employees, donors, beneficiaries, and the organization's mission.

When Federal Funding Becomes Political

Nonprofits have been in the political crossfire in a general way before. Higher education and climate change have been regular targets of conservative ire. Conservatives long claimed Democratic administrations were unfairly targeting churches and religious organizations for IRS review and action.

That historic backdrop pales compared to the environment of 2025 and 2026. The DOGE period actions eliminated an entire agency and gutted many nonprofits performing extensive relief work. Since that time, the Trump administration has campaigned aggressively against what it considers unlawful diversity, equity, and inclusion (DEI) programs. This has created extraordinary uncertainty for nonprofits that depend on federal grants. These include organizations working in public health, higher and secondary education, housing, and other fields. Nonprofits can face scrutiny even where their programs primarily deliver services rather than advance any particular political viewpoint simply because of a website statement or description of a scholarship.

The National Institutes of Health provides a stark illustration. In June 2026, Nature reported that NIH was using a screening process involving 235 disfavored terms, including words associated with gender and climate change, and that additional reviews had delayed hundreds of grant applications. Flagged terms do not automatically disqualify proposals, and NIH says its decisions consider scientific merit, public health priorities, and legal requirements. The operational risk is nevertheless very real: funding previously viewed as dependable may become delayed, conditioned, or withdrawn.

Nonprofits should review the terms of each government grant, identify programs dependent on a single funding source, and develop contingency budgets before a crisis hits. They should not reflexively abandon mission-related services or rewrite grant applications simply to avoid certain words. Changes must remain accurate and consistent with civil rights and grant obligations. The Justice Department has also signaled False Claims Act scrutiny of recipients who knowingly misrepresent their civil rights compliance.

A funding suspension or termination warrants immediate review of award terms, available challenges, and deadlines. Political priorities change; legal rights still matter.

Political Clothing and Conversations at Work

Private nonprofits generally have more authority to regulate workplace political expression than public employers. The First Amendment usually does not give employees a right to wear campaign clothing or engage in partisan advocacy at a private workplace. Receiving government funding does not, by itself, transform a nonprofit into a government employer.

A nonprofit may ordinarily establish a reasonable, viewpoint-neutral dress policy that bars candidate hats, campaign buttons, and partisan slogans while employees are working, particularly in positions serving clients, patients, students, or the public. The policy should be applied consistently, without favoring one party or viewpoint. It should also distinguish ordinary campaign material from religious expression and union insignia or messages concerning wages, workplace discrimination, or working conditions. Those topics may carry separate legal protections. For example, D.C.'s Human Rights Act also protects personal appearance, subject to exceptions for uniformly applied workplace standards serving a reasonable business purpose.

Rather than prohibit every political conversation, insist on respectful behavior, nondiscriminatory service, no intimidation or harassment, and no disruption of work. Supervisors should not turn staff meetings into campaign rallies.

What About Employees' Off-Duty Social Media?

This is often the harder question. Suppose an employee posts an angry political statement on a personal account outside working hours. The posting embarrasses the nonprofit or conflicts with its stated values. Can management require its removal or terminate the employee?

The answer is sometimes, but not automatically. Virginia and Maryland private employers generally have discretion to address off-duty misconduct, including threats, discriminatory harassment, confidentiality breaches, misuse of organizational branding, or conduct that materially undermines job performance. But political disagreement alone is a poor reason for discipline, especially where specific legal protections may apply.

The District of Columbia expressly prohibits employment discrimination based on political affiliation, meaning belonging to or endorsing a political party. The National Labor Relations Act can protect employees, including nonunion employees, when social media posts concern collective efforts to improve pay, safety, discrimination, or other working conditions. Virginia law also generally prohibits employers from demanding passwords to employees' personal social media accounts, although publicly available content may be reviewed.

Before disciplining anyone, verify the post and its context, determine whether it actually implicates job duties or organizational operations, assess applicable legal protections, and compare how similar incidents have been handled with respect to other employees in the past. A broad prohibition on posts that “reflect poorly on the organization” invites inconsistent enforcement and may interfere with legally protected employee activity. A carefully drafted policy is much better than a demand that employees keep their private political views to themselves.

Maryland nonprofits also face a timely new requirement. Effective October 1, 2026, the Maryland Worker Freedom Act generally protects employees who decline to attend employer-sponsored meetings promoting the employer's views on political or religious matters. The law contains exceptions, including certain mission-related nonprofit training and legally required instruction. It also carries employee-notice requirements beginning November 1. Nonprofits should review mandatory meetings and training before election season intensifies.

Tax Exemption, Advocacy, and the Boardroom

Nonprofits should not confuse mission advocacy with partisan campaigning. Section 501(c)(3) organizations are prohibited from intervening for or against candidates for public office. They may engage in genuinely nonpartisan voter education and registration activities, and many may undertake limited lobbying or policy advocacy so long as they comply with requirement limitations under applicable tax rules and laws. Supporting a cause is not necessarily supporting a candidate, but context matters.

Boards and executives should review political communications, candidate appearances, newsletters, websites, and organizational social media accounts. Individual directors and employees may express political views in their personal capacities, but they should not use nonprofit resources or suggest that the organization endorses their candidates. A personal disclaimer is no substitute for actual separation.

Our recent blog, The IRS May Redraw the Tax-Exemption Line for Private Schools, also discusses proposed Treasury and IRS regulations that could jeopardize Section 501(c)(3) status for nonprofit colleges and other private schools using race-based preferences, including DEI-related admissions or scholarship programs. The rules are not yet final, but the potential financial consequences warrant board-level attention moving forward.

Other Political Risks Are Easy to Miss

Donors may demand changes to programming. Board members may disagree sharply about public statements. Activists may target an organization online, and threats or harassment may compromise employee or client safety. Government inquiries, shifting grant conditions, and reputational controversies can consume resources that should be serving the mission. A nonprofit also risks losing community trust if political pressure causes it to retreat from its stated commitments and values without any principled explanation.

Treat political risk as a recurring board-level governance issue. Evaluate funding concentration, mission-critical programs, donor restrictions, public communications, employee safety, and possible service disruptions. Adopt clear, evenhanded dress, workplace-conduct, social media, and political-activity policies. Preserve employees' rights, train managers to recognize protected speech and harassment, and require HR or legal review before politically sensitive discipline. Designate who can speak for the organization and who will respond to funding challenges or public controversy.

As this series has emphasized, nonprofits cannot eliminate uncertainty. They can, however, make thoughtful decisions before politics becomes a workplace crisis or threatens their ability to serve. The goal is not to become politically silent. It is to remain legally compliant, mission-focused, and prepared to defend the organization's work.

For more information or assistance with nonprofit governance, employment policies, or legal compliance, please contact Timothy Hughes at (703) 526-5582, thughes@beankinney.com, or Doug Taylor at (703) 526-5586, rdougtaylor@beankinney.com. We work with nonprofits throughout Virginia, Maryland, and the District of Columbia.

This article is for informational purposes only and does not constitute legal advice. Any views expressed are those of the authors and not necessarily those of the firm or its clients.