May is National Egg Month, and the nonprofit sector knows something about scrambling to keep up. With federal funding in flux, appropriations timelines uncertain, and legislative attention focused elsewhere, charitable organizations have spent much of 2026 navigating a challenging environment with few easy answers. Congress has a full plate — and nonprofit priorities, for now, are waiting their turn. This month, we will take a crack at where things stand and what the charitable sector needs to know heading into the summer.
The Reconciliation Parade Keeps Marching
With both chambers having adopted the Fiscal Year 2026 (FY26) budget resolution, Reconciliation 2.0 is now moving through Congress. The bill is narrowly focused on immigration enforcement funding, using the reconciliation process to bypass partisan budget disagreements that led to Department of Homeland Security (DHS)’s record 76-day partial shutdown earlier this year. The House and Senate Judiciary and Homeland Security Committees are each authorized to increase the deficit by up to $70 billion over 10 years — potentially $140 billion combined — with funds directed to U.S. Immigration and Customs Enforcement (ICE) and U.S. Customs and Border Protection (CBP), and available for obligation through FY2029. Senate leadership had been on track to meet a target of June 1 for final passage until progress was stalled amid bipartisan concerns about a recently announced $1.8 billion “anti-weaponization” fund through the Department of Justice (DOJ).
Even as Reconciliation 2.0 works its way through Congress, some Republicans are already eyeing a third package. Conservatives have called for a Reconciliation 3.0 focused on boosting Pentagon funding and addressing alleged fraud in federal programs, with some members also floating tax provisions. However, the effort faces significant resistance from Senate Republicans, including Majority Leader Thune, with growing skepticism that a third bill is achievable this Congress.
The FY2027 Appropriations Clock Is Ticking
Congress has turned its attention to FY27 funding, with the annual appropriations process now underway in the House. Of the 12 FY27 spending bills, nine have advanced through subcommittee markup and seven have cleared full committee — though so far only one, the Military Construction and Veterans Affairs Appropriations Act (H.R. 8469), has passed the full House floor. All 12 bills must clear both chambers and be signed into law before the October 1 deadline to avoid yet another shutdown.
The calendar, however, is working against a smooth process. With Congress simultaneously managing Reconciliation 2.0, early discussions about a potential Reconciliation 3.0, and the August recess looming, the window to move all 12 bills through the House and Senate under regular order is narrowing quickly. We will continue monitoring the FY27 appropriations process and any developments that could affect funding for programs the charitable sector depends on.
The SPLC Indictment: An Attack on Civil Society
On April 21, 2026, the Department of Justice indicted the Southern Poverty Law Center (SPLC) on 11 counts of wire fraud, false statements to a federally insured bank, and conspiracy to commit concealment money laundering. The DOJ alleges the civil rights organization defrauded donors by using their money to pay informants embedded in white supremacist and other violent extremist groups — the very groups SPLC has long monitored and exposed. SPLC has said its informant program was used to monitor threats of violence, and that information was often shared with local and federal law enforcement. The organization has vowed to vigorously defend itself against what it describes as false allegations.
The indictment arrives amid a broader pattern of federal scrutiny directed at civil rights and advocacy organizations under the current administration. Founded in 1971, SPLC has spent more than five decades fighting white supremacy and advancing civil rights — a mission its leadership says remains unchanged. Independent Sector President and CEO Dr. Akilah Watkins responded swiftly, urging policymakers to protect the independence of American civil society and the rights of all nonprofit and philanthropic organizations to speak out and advance their charitable missions without fear of political retaliation.
Charity Parity Act Proposes a New Door for Donors
On May 13, 2026, the Charity Parity Act (S. 4511/H.R. 8783) was introduced simultaneously in the House and Senate with bipartisan backing from both chambers. The bill is led by Representatives Don Beyer (D-VA) and Mike Kelly (R-PA) in the House and Senators Kevin Cramer (R-ND) and Chris Coons (D-DE) in the Senate.
The legislation addresses a long-standing gap in how Americans can give charitably from their retirement savings. Under current law, retirement savers can make qualified charitable distributions (QCDs) of up to $111,000 per year directly from an IRA — tax-free — but that option is not available for employer-sponsored plans like 401(k)s, 403(b)s, and 457(b)s. Those who hold the bulk of their retirement savings in employer-sponsored plans currently face a cumbersome and potentially costly workaround: rolling assets into an IRA first before executing a charitable distribution. The Charity Parity Act would close that gap, giving retirement savers the same charitable giving options regardless of where their assets are held.
Senate Fails to Overturn PSLF Rule as July 1 Deadline Approaches
On May 20, the Senate failed to advance S.J. Res. 182, a Congressional Review Act resolution led by Senators Tim Kaine (D-VA), Kirsten Gillibrand (D-NY), and Cory Booker (D-NJ) that would have nullified a Department of Education final rule set to take effect July 1, 2026.
The rule, finalized October 31, 2025, allows the Secretary of Education to disqualify employers from the Public Service Loan Forgiveness (PSLF) program based on a vague “substantial illegal purpose” standard with no clear definition of what that means in practice. This rule gives the Secretary of Education broad, subjective discretion to limit eligibility based on a nonprofit’s mission or perceived ideological alignment, making the program vulnerable to shifting political priorities under the current or any future administration. For the charitable sector, the stakes are significant: PSLF has long served as a critical recruitment and retention tool, allowing nonprofit employees to pursue loan forgiveness after 10 years of public service. With the rule now on track to take effect in five weeks, Independent Sector will continue monitoring active litigation and any further congressional action to protect the program’s integrity.
Mark Your Calendars: ISNS 2026 Coming to Phoenix!
Registration is now open for the Independent Sector National Summit (ISNS) 2026, taking place October 13-16 in Phoenix. ISNS brings together nonprofit and philanthropic leaders from across the country for expert-led sessions designed to sharpen your skills, deepen your policy knowledge, and build the partnerships that move the sector forward. Whether you’re looking to strengthen your organization’s leadership, expand your coalitions, or simply connect with peers who understand the work, ISNS is where those conversations happen. Register today and take advantage of the early bird rate, available through June 30.
Travis Swanson is the Government Relations Manager at Independent Sector
