Council Connection: Updates for Council Members

Public policy news and updates for the philanthropic sector

What We're Tracking in DC

Fall Congressional Preview

Earlier this week, Congress returned to Washington and will begin to tackle some of the major legislative issues on its agenda for the fall:

  • Government Funding: Most pressing, government funding expires on September 30, and Congress only has 12 legislative days to avoid a shutdown. It is unlikely Congress will pass all 12 appropriations bills before the end of the fiscal year, requiring a continuing resolution (CR) to extend government funding. However, it is unclear whether House and Senate Republican leadership will try to pass a short-term CR that extends funding to mid-November or December, or a longer-term CR into next year. Also to be determined is whether the CR will be clean, meaning free of extraneous provisions, or whether policy riders and other items will be attached. Government shutdowns can impact the nonprofit sector in various ways; we will continue to share updates as the end of the fiscal year approaches.
  • Another Big Beautiful Bill? Some members of the House Republican conference have expressed a desire to pass another major bill that focuses on tax and spending priorities not included in the One Big Beautiful Bill Act (P.L.119-21) that passed earlier this summer. Speaker of the House Mike Johnson (R-LA) has stated his intention to pass another tax bill by the end of the year, possibly through another budget reconciliation package.
  • Other Must-Pass Legislation: Congress must also complete the National Defense Authorization Act and address other programs set to expire, including enhanced tax credits for health insurance coverage under the Affordable Care Act and the National Flood Insurance Program. Republicans may also try to act on other Trump Administration priorities, such as recissions of previously-appropriated federal funding.
  • Nominees for Executive Branch and Judicial Positions: Finally, the Senate continues to push through Trump Administration nominations. We’re watching nomination hearings for key positions at Treasury and the IRS in the coming weeks, and we’ll keep you updated on any developments.

Department of Education Releases Draft Regulations on Public Service Loan Forgiveness

Last month, the Department of Education released a Notice of Proposed Rulemaking concerning Public Service Loan Forgiveness, a program that forgives student loans once certain public service employees reach ten years of qualifying employment.

Among other provisions, the proposed rule would narrow the definition of a qualifying employer to exclude organizations that the Secretary has determined engaged in activities that have a “substantial illegal purpose.” The proposal defines activities that constitute a "substantial illegal purpose,” in accordance with Executive Order 14235.

The Council supports Public Service Loan Forgiveness, a critical support for the nonprofit workforce. Public comments on the proposed regulations are due September 17, 2025. 

Additional Updates

  • On August 7, President Trump issued an executive order, Improving Oversight of Federal Grantmaking, focused on the review and approval processes for discretionary grant awards. The order seeks to revamp federal grantmaking to ensure federal grants are aligned with the Trump Administration’s policy priorities and interests. Council members can view a more detailed summary on our website.
  • On July 29, Attorney General Pam Bondi issued a memorandum that included new guidance for federal funding recipients about what the Administration views as unlawful discrimination based on protected characteristics. The memo includes what it calls "non-binding suggestions" to help organizations minimize potential legal and operational risks. While the guidance is directed at entities that receive federal funding and entities subject to federal anti-discrimination laws, it may have a broader reach affecting federal funding recipients' (financial) relationships with contractors, grantees, and other third parties.
  • The Department of the Treasury posted its spring regulatory agenda, which lists nearly 200 issues Treasury is actively working on regulations to address in the coming months. We expect additional regulations from Treasury and the IRS as part of implementation of H.R.1. We’ll share updates on regulations that impact philanthropy in Snapshot and our other communications.

Happening in the States

Anti-DEI Bills in the States

A federal district court declined to block implementation of a law prohibiting DEI in Alabama. The law bans public schools from funding or sponsoring DEI programs; prohibits teachers in public schools, colleges, and universities from requiring students to assent to any of eight divisive concepts; and imposes anti-DEI rules on school boards and state-funded educational institutions. Although it contains “safe harbor” provisions to protect free speech rights, it also empowers state universities to discipline or fire employees for violations. Plaintiffs argued that it was unconstitutional and void for vagueness.

Elsewhere, two other anti-DEI measures took effect in July. New Hampshire enacted a bill to prohibit DEI-related initiatives, programs, training, or policies across all public entities, and provide for the removal of DEI provisions from state contracts. In West Virginia, lawmakers broadly prohibited DEI in hiring, education, and across all departments of state government, and sharply curtailed DEI training in the state. 

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