With National Noodle Month in full swing, it’s the perfect time to appreciate the versatility and comfort of a dish that has been shaped by cultures around the world. But much like crafting the perfect bowl of pasta, shaping effective policy requires the right mix of ingredients, patience, and a keen understanding of the process.
In Congress, legislation impacting the charitable sector must navigate a complex system of committees, amendments, and negotiations before it reaches the president’s desk. Just as a great pasta dish depends on quality ingredients and careful preparation, sound charitable policy relies on informed advocacy, coalition-building, and legislative strategy. As lawmakers consider tax incentives for charitable giving and funding for social programs, understanding the legislative process is key for those working to strengthen the nonprofit sector.
Congress Averts Shutdown with Last-Minute Funding Deal
In a dramatic turn of events, just hours ahead of a looming government shutdown, Congress passed a Continuing Resolution (CR) on March 14 to keep the federal government funded through September 30, 2025. The bill, which ensures funding for agencies to remain operational, saw a largely partisan divide in both chambers.
The House narrowly approved the measure on March 11 with a 217-213 vote, while the Senate followed suit on March 14. Though the final passage in the Senate largely mirrored the partisan split seen in the House, an earlier procedural vote to advance the bill in the Senate saw nine Democrats break ranks to support it. After several weeks of uncertainty, President Trump signed the bill into law on March 15.
With the government funded through the end of Fiscal Year 2025, Congress will now likely turn its attention to other legislative priorities. Budget reconciliation is expected to take center stage, setting up debates over tax policy and spending priorities. Lawmakers will also soon begin the process of crafting appropriations bills for Fiscal Year 2026 — which could set up yet another government funding showdown in the coming months.
While this stopgap measure provides short-term stability, the deep divisions in Congress over federal spending remain. The months ahead will determine whether lawmakers can find common ground — or whether we’re headed toward another potential shutdown when the fiscal year comes to a close.
Budget Reconciliation: The Next Big Fight in Congress
As Congress moves forward with budget reconciliation, the process remains fluid. While bill language is still being developed, both the House and Senate are debating whether to move forward with two separate bills or one large package. Despite the uncertainty, one thing is clear: the Republican-controlled Congress is expected to use this process to advance key priorities of the Trump-Vance administration, aiming to fulfill campaign promises.
Budget reconciliation is a powerful tool because it allows the Senate to bypass the filibuster, meaning Republicans can pass a bill with a simple majority. However, while they have full control of Congress, their narrow majority in the House adds a layer of complexity. Leadership must craft legislation that appeals to nearly all Republicans — no small feat — especially given the internal ideological divisions within the party. That said, the recent passage of the continuing resolution (CR) on a largely partisan vote likely gives Republican leadership confidence that they can unify their caucus to push through a major reconciliation bill.
A key requirement of the reconciliation process is that specific budgetary targets must be met, and all costs beyond those targets must be offset by spending cuts or tax increases. This reality has led to growing concerns across sectors about where those offsets will come from. IS has been actively engaging with congressional offices to speak up about any potential policies that harm the charitable sector and the people we serve. In the coming weeks, as bill language solidifies and priorities become clearer, expect heated debates, last-minute negotiations, and significant political maneuvering. IS will continue to track developments closely and work to make sure lawmakers understand the real-world impact of the decisions they’re making.
Public Service Loan Forgiveness Executive Order
On March 7, the Trump-Vance administration issued an executive order directing the Secretary of Education to exclude organizations with a “substantial illegal purpose” from serving as eligible employers under the Public Service Loan Forgiveness (PSLF) program. While this may sound like a significant policy shift, the reality is that executive orders cannot change the law — and the law is already clear.
PSLF was established by Congress through a bipartisan vote in 2007. Under the program, student borrowers who work full-time for a qualifying employer — such as a government agency or a 501(c)(3) nonprofit — can have their remaining student loan balance forgiven after making 120 qualifying payments. The law explicitly states that employment at any 501(c)(3) nonprofit qualifies, and engaging in illegal activity is already grounds for an organization to lose its nonprofit status. While the impact of the executive order is highly questionable at best, it is working to create confusion and fear among borrowers and nonprofit employees.
Since October 2024, more than 1 million borrowers have had their student loans forgiven under PSLF, providing them with financial relief and ensuring that public service careers remain viable options for people with student debt. The program is a critical tool for recruiting and retaining talent in government and the nonprofit sector, where salaries are often lower than in the private sector.
While executive orders can set agency priorities, they do not override existing law. Borrowers who work for 501(c)(3) organizations should continue following official guidance from the Department of Education and their loan servicer to ensure they meet PSLF requirements. The law remains unchanged, and borrowers should not be discouraged from pursuing the forgiveness they’ve earned.
As conversations around student debt and public service continue, it’s important to stay informed and engaged. If you have questions about your PSLF eligibility, check official resources with the Department of Education or your loan servicer. Ensuring the long-term success of PSLF will require continued attention, advocacy, and a commitment to upholding the program’s original intent: making public service a financially sustainable career choice.
Bipartisan Bill Seeks Retirement Fairness for Nonprofit and Public Sector Workers
Last month, a bipartisan group of lawmakers reintroduced the Retirement Fairness for Charities and Educational Institutions Act (S. 425/H.R. 1013) to expand investment options for 403(b) retirement plans. Sponsored by Sens. Katie Britt (R-AL), Raphael Warnock (D-GA), Bill Cassidy (R-LA), and Gary Peters (D-MI) in the Senate, along with Reps. Frank Lucas (R-OK), Josh Gottheimer (D-NJ), Andy Barr (R-KY), and Bill Foster (D-IL) in the House, the bill would allow 403(b) plans — used by nonprofit and public sector employees — to invest in collective investment trusts (CITs) and insurance company separate accounts, similar to 401(k) plans. This change could lower fees and improve retirement savings outcomes for millions of workers in schools, nonprofits, and other tax-exempt organizations.
For too long, nonprofit and public sector employees have had fewer investment options than their private-sector counterparts, limiting their ability to maximize retirement savings. By modernizing 403(b) plans, this bill would provide teachers, nonprofit staff, and other public service workers with access to lower-cost and more diversified investments. With broad bipartisan support, this legislation is a commonsense step toward strengthening retirement security for those who dedicate their careers to serving communities.
The Power of Showing Up: 22nd Annual Foundations on the Hill
Last month, the 22nd annual Foundations on the Hill (FOTH) took place in Washington, D.C., bringing together more than 370 advocates from across the country — the largest turnout in the event’s history. The week began with engaging programming and concluded with advocates heading to Capitol Hill, where they held over 200 meetings with congressional offices.
Congressional offices were very receptive to advocates’ support of the Charitable Act, and since FOTH, cosponsorship of the bill has grown from 14 to 40 members in the House! These results demonstrate the direct impact of Hill meetings and the importance of continued advocacy.
If you did not attend FOTH, you still have an opportunity to engage with lawmakers on this legislation. Check to see if your Senators and Representatives have signed on to the bill, and if they haven’t, reach out to their offices and urge them to support the Charitable Act.
FOTH is about more than just Hill advocacy. It’s also a chance to connect with colleagues and peer organizations from across the country, share insights, and strengthen the collective work being done in communities nationwide. For those who value these connections and want to continue the conversation, consider joining us at Independent Sector’s National Summit (ISNS) October 27-29 in Atlanta, Georgia. It will be another great opportunity to learn, collaborate, and build collective power for nonprofits and philanthropy.
Travis Swanson is the Government Relations Manager at Independent Sector
