Considerations for Nonprofits, Healthcare Entities, and State and Local Governments following President Trump’s March 4, 2025, Address

President Donald Trump’s March 4, 2025, address to Congress outlined a series of policy initiatives with significant financial and operational implications for nonprofits, healthcare entities, and state and local governments — especially those that rely on federal funding. His proposals to freeze federal grants, restructure healthcare funding, tighten immigration policies, and impose trade tariffs on imports present serious challenges for these sectors.

Many of these policies have already been implemented through executive orders, and several have faced immediate legal challenges. This article summarizes the key policies outlined in the President’s speech, their financial implications, actions taken through executive orders, and pending litigation that may shape their future enforcement.

Federal Funding Freeze and Spending Cuts  

President Trump had previously ordered an immediate freeze on all federal grants, loans, and financial assistance programs to allow for a government-wide spending review. 

On January 27, 2025, the Office of Management and Budget (OMB) issued Memorandum M-25-13, instructing all federal agencies to pause disbursement of funds under existing grants and federal assistance programs while reviewing compliance with the administration’s executive orders. This memorandum has subsequently been rescinded.

A federal judge also issued an administrative stay temporarily blocking the OMB’s directive, arguing that the order lacked congressional approval and risked disrupting essential services. Some federal agencies have continued to withhold funds despite the court ruling, leading to further legal battles.

Nonprofits reliant on federal funding may experience cash flow disruptions due to delayed reimbursements or suspended payments. Many organizations will need to seek other sources of funding such as private donors, corporate sponsorships, or state and local funding to compensate for lost resources. If the disruption extends beyond a few months, program cutbacks, layoffs, and service reductions could follow, we have already seen some organization implement some of these strategies.

CFOs should assess their reliance on federal funding and explore alternative revenue strategies. Monitoring cash flow and ensuring liquidity reserves can withstand delays in federal disbursements is critical. Cost-cutting measures, including program adjustments and staffing changes, may also be necessary to sustain operations.

Healthcare Policy Revisions and ACA Rollbacks

President Trump has reversed key policies of the Affordable Care Act (ACA), including eliminating Medicaid expansion incentives for states, reversing federal drug pricing controls on Medicare and Medicaid, and reducing federal support for ACA enrollment programs. He emphasized, “Effective immediately, we are rolling back the disastrous policies of the ACAfordable Care Act. This includes eliminating Medicaid expansion incentives and reversing burdensome regulations that have stifled innovation and increased costs. Our goal is to empower states and healthcare providers to deliver patient-centered care without federal overreach.”

The President has signed multiple executive orders aimed at rolling back ACA policies, including one that blocked federal funding for providers of gender-affirming healthcare for transgender youth under 19.

A federal judge in Baltimore issued a nationwide injunction preventing the enforcement of the order restricting federal funding for gender-affirming care. Several states have also filed lawsuits arguing that Medicaid funding restrictions violate federal healthcare laws.

Nonprofit healthcare providers may see lower reimbursement rates, affecting service sustainability. Drug pricing rollbacks may increase expenses for nonprofits providing subsidized medications. A decline in ACA enrollment support may drive more uninsured individuals to nonprofits for assistance, increasing uncompensated care costs.

CFOs should reassess their reliance on Medicaid reimbursements and prepare for reduced federal healthcare support. Exploring alternative revenue models such as private pay services or state-funded programs may help offset financial shortfalls. Budgeting for an increase in uncompensated care costs as more individuals become uninsured is also essential.

Immigration and Workforce Policies

President Trump announced stricter enforcement of immigration laws and a review of work permit programs, impacting industries that rely on immigrant labor. He stated, “We are enforcing strict immigration policies to protect American jobs and ensure public safety. This includes cracking down on illegal immigration and reevaluating work permit programs that have been exploited at the expense of American workers. Our focus is on securing the border and implementing a merit-based immigration system.”

President Trump has issued six executive orders focused on immigration policies, including work permit restrictions and border security measures.

Multiple lawsuits have been filed challenging the constitutionality of work permit restrictions. Courts are evaluating whether new visa limitations violate labor rights protections under federal law.

Nonprofits relying on immigrant workers may experience higher staffing costs as labor shortages drive up wages. Employers may need to invest more in legal compliance, visa sponsorship, and workforce planning. If nonprofits lose access to skilled immigrant labor, shortages in home healthcare workers, food distribution staff, and refugee services could impact their ability to serve communities.

CFOs should plan for workforce shortages by investing in domestic recruitment efforts and job training programs. Preparing for increased compliance costs related to work permits and visa processes will also be necessary. Advocacy efforts may be required to push for sector-specific immigration exemptions.

Trade Tariffs and Economic Policies  

President Trump recently proposed imposing new tariffs on imports from Canada, Mexico, and China under the International Emergency Economic Powers Act (IEEPA). Later, the tariffs of 25% on Mexican- and Canadian-originating goods was paused until April 22nd. If these tariffs ultimately go into effect, any goods which qualify as “originating” in Canada and Mexico (pursuant to the product-specific rules of origin in the US-Mexico-Canada-Agreement [USMCA]) will be exempt.

In contrast, the additional tariffs of 10% on Chinese-originating goods went into effect as planned on March 4th – which were in addition to the 10% imposed under IIEPA on February 4th. In response, China’s finance ministry announced that duties of 15% would be imposed on U.S. imports of chicken, corn, cotton, and wheat, and that a 10% tariff would apply to imports of aquatic products, beef, dairy products, fruits, sorghum, soybeans and vegetables – all produced mostly in “farm states” represented in Congress mainly by Republican Senators.

Under IEEPA, the “national emergencies” cited as the reasons for the tariffs can only be undone by a joint congressional resolution of disapproval – thus ending the tariffs. Given the current make-up of Congress, i.e., both houses are under Republican control, no such resolution is expected.

However, many legal scholars believe the President’s use of IEEPA to impose tariffs is not only unprecedented but may be illegal. While no immediate legal challenges have been reported, affected industries may pursue cases under international trade agreements.

Nonprofits that rely on imported medical supplies, construction materials, or technology equipment may face higher costs. Healthcare providers may see price increases on pharmaceuticals and diagnostic tools, while nonprofits engaged in housing and infrastructure projects could experience higher material costs. Food assistance programs could also see price increases in bulk food purchases.

CFOs should review procurement strategies to offset price increases. Reassessing capital budgets to account for higher project costs will be essential. Fundraising efforts may need to be increased to cover rising program expenses driven by tariff-related price hikes.