How Smart Is Defunding Nonprofits?
A Possible Strategic Misstep
The biggest story this week has been Trump’s order freezing funding to, among countless other critical government functions, a whole raft of nonprofit organizations and services. What’s been shocking isn’t that he did it, but that he did so with such a broad pen.
We here at D3 generally try to avoid MAGA kremlinology, but the likely tactical intention here is that Trump wants to maximize the damage he does across the federal government. Although the most alarmist voices like Bulwark’s JVL see a SCOTUS eager to capitulate — to keep being little better than active collaborators in the naïve hope that they might reserve some power to confront him in some future emergency — I think that SCOTUS is most likely to do what they did with the immunity case: They’ll slap down some of the most obvious stuff (Head Start, etc.1), but then invent a brand-new 3-tier system of programs that the executive branch can get away with defunding. [Ed: So, by being as broad as possible up front, Trump presents SCOTUS with a wider range of targets to exempt from the Impoundment Act.]
Regardless, a likely outcome of all this is that Trump may end up doing the Abundance Agenda folks’ work for them. People like Matt Yglesias and Ezra Klein have been decrying the works of The Groups for several years now, because they tend to slow progress to a crawl with their everything-bagel project requirements and massively bloat costs by hiring nonprofit consultants to manage these requirements. Defunding them so violently may not have been the method Matt or Ezra might have preferred — many of these nonprofits are doing work that we Abundance folks ideologically agree with, but simply want done in different ways and without causing violent unemployments — but there’s no doubt that it’ll achieve many of the same overall objectives in the long-run, after the traumas have subsided and non-profiters have found other jobs2.
Moreover, the Trump team hasn’t remotely thought through the long-term effects. Turning thousands, if not hundreds of thousands of people, out of their jobs, isn’t going to magically change their ideology. Many of them will start successful new businesses. Many of them will go work for state and local governments. Many of them will concentrate in other nonprofits that are privately-funded to withstand the storm. A mass destabilizing unemployment event will not cow these people, but leave them vengeful and seeking a new movement to coalesce around. And in the medium term, putting people out on the job market means unemployment will rise and wage growth will suffer, right as whatever else Trump wants to do kicks in (IE inflationary tariffs!).
Now, given the danger of this moment, it’s possible that a descent into authoritarianism or illiberalism ends up mooting the seeds that Trump’s sowing right now. If we’re stuck under an illiberal MAGA regime for the next 3-4 decades, it simply won’t matter that Trump dealt a major blow to The Groups’ influence in government. But if and when the pendulum swings back, he may end up having indirectly done a lot to empower the growing Abundance faction within the Democratic Party.
Yes, I know Head Start has officially been reinstated, but who knows what other similar programs will be stuck.
Which, admittedly is a big IF. I know people directly affected here, and could never bring myself to root for their hardships. Like Matt and Ezra, to the extent that I want these sectors reorganized and reoriented, I want this to happen in a peaceful manner that actually empowers the people impacted — more on this in a later article. The point is, though, as devastated as people are at the moment, they won’t be down and out for long.