Catalyst Biweekly Policy Briefing Issue XV: Strength in Numbers

Hello again.

While we’ve faced dramatic policy shifts and funding cuts since January, the past two weeks in California have felt particularly challenging. While immigration enforcement dominated headlines, more than 60,000 people gathered in downtown San Diego and the Imperial Valley to protest the administration’s actions. Meanwhile, the Senate unveiled its version of the budget reconciliation bill, which includes several wins for the philanthropic sector but continued deep cuts to safety net programs. Let’s get into it.

(Catch up on our previous installments of this briefing here.)

THE FACTS

FEDERAL BUDGET

• ​​​​​​The Senate version of the budget reconciliation bill came out of the Senate Finance Committee with a few promising updates for the philanthropic sector:
  • Foundation excise tax increase removed: The Senate bill eliminates the harmful tiered excise tax increase on private foundation investment income that was included in the House bill.
  • Nonprofit parking tax removed: The provision that would have imposed a new tax on nonprofit expenses for parking and transportation fringe benefits has also been stripped from the bill.
  • Stronger universal charitable deduction included: The Senate bill includes a stronger, permanent universal charitable deduction of $1,000 for individuals and $2,000 for joint filers (with a 0.5% adjusted gross income (AGI) floor).
• This version of the bill still includes a new 1% AGI floor on charitable deductions for corporations and a 35% cap on itemized deductions for higher-income earners. Both provisions have the potential to reduce charitable donations.
• While the tentative deadline for a final bill remains July 4, many senators still have significant concerns. Some argue the bill doesn’t include enough cuts, others believe it cuts too deeply into safety net programs, and some have concerns about the proposed tax reductions. Once the Senate finalizes its version, the House must agree to all the changes. The majority leader hopes to begin Senate debate by the middle of next week.
• Committees are still working on fiscal estimates for their sections of the bill, as well as awaiting final rulings from the Senate parliamentarian, who will determine whether certain policy provisions comply with reconciliation rules. As with many bills, lawmakers have inserted favored measures – sometimes unrelated to the budget – to gain broader support. However, under the “Byrd rule,” any provision with a negligible effect on the budget must be removed; otherwise, the bill will no longer qualify for the reconciliation process and could be subject to a Senate filibuster.
• The Government Accountability Office concluded one of its 39 investigations into the Trump administration’s freezing of funds from federal agencies, finding that the administration had overstepped its authority by freezing funds appropriated by Congress to support libraries, archives, and museums across the country.

ACTIONS AGAINST NONPROFIT AND GOVERNMENT LEADERS

• ​​​​​​More than 200 nonprofit organizations are facing accusations of illegal activity and are subject to congressional investigation.
  • The Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA) received a notice from the chair of the Senate Subcommittee on Crime and Counterterrorism stating the nonprofit has an “alleged role in financing and materially supporting…lawless mob actions” in Los Angeles. The organization has been instructed to retain various communications and financial records. Executive Director Angelica Salas said CHIRLA will not be intimidated and will continue to stand with immigrant communities.
  • Numerous funders spoke up with support for CHIRLA and other immigrant serving organizations, including The California Wellness Foundation, which counts Angelica Salas as a board member, The California Endowment, Prebys Foundation, and Philanthropy CA.
  • Since then, more than 200 other organizations have received letters from the House Committee on Homeland Security informing them they will be investigated for their role in funding services provided to “inadmissible aliens.”
• California state and local elected officials who have spoken out against the administration have also faced aggressive responses.
  • Los Angeles Mayor Karen Bass and Gov. Gavin Newsom are under investigation for their roles in the protests in Los Angeles.
  • Sen. Alex Padilla was removed forcibly from a press briefing with Homeland Security Director Kristi Noem, handcuffed and briefly detained this week as he attempted to ask a question about the deployment of military in Los Angeles. Padilla spoke on the Senate floor Tuesday, condemning his treatment by law enforcement and encouraging Americans to use their right to peaceful protest.
  • At least five elected officials have been arrested or detained in the last week for protesting immigration policies.
• Leaders in our city – the eighth-largest city in the country, with a majority Democratic City Council – have expressed concern after the president called on U.S. Immigration and Customs Enforcement (ICE) to increase and focus deportation efforts in large, Democrat-run cities. The president said the leaders of those cities “are sick of mind, hate our country, and actually want to destroy our inner cities.”

IMMIGRATION ENFORCEMENT & COMMUNITY RESPONSE

• ​​​​​​On June 6, ICE raids at various businesses in Los Angeles sparked protests in the downtown area that led to clashes between demonstrators and law enforcement. Protests grew the following day, and – despite opposition from Los Angeles Mayor Karen Bass and California Gov. Gavin Newsom – President Trump deployed 2,000 National Guard members to the area. Both the governor and the mayor criticized the move as an overreaction that would inflame, rather than de-escalate, tensions. The president then authorized the deployment of an additional 700 Marines to Los Angeles.
  • On June 12, a federal judge issued a temporary restraining order declaring the National Guard deployment illegal. The administration immediately appealed, and yesterday, an appeals court ruled that the president can retain control of the National Guard in Los Angeles while the state proceeds with a lawsuit.
  • Before the appeals court’s decision—and as businesses reopened, curfews were lifted, and protests diminished—the administration invoked Title 10 to deploy an additional 2,000 National Guard troops. Title 10 allows the president to call in the Guard when the country is at risk of invasion or rebellion.
  • In a speech at Fort Bragg, President Trump referred to the protesters as “a foreign enemy” and promised to “liberate” Los Angeles.
• On June 10, the Department of Homeland Security ordered that the Centers for Medicare and Medicaid Services provide personal data for all Medi-Cal enrollees, including U.S. citizens, immigrants with both satisfactory and unsatisfactory status, and those who have only accessed emergency care. This directive marks a significant departure from longstanding rules limiting the use of healthcare data for treatment-related purposes only. Gov. Newsom warned that such data use puts immigrants and mixed-status families –“already under relentless, indiscriminate attack by this administration”– at particular risk.
• Increased immigration enforcement activity has also been reported throughout San Diego and Imperial Counties.
  • Despite pressure from federal agencies, nonprofits, school districts, and other community groups continue to document incidents and provide legal and social support to those detained and their families.
  • The intensified enforcement, particularly targeting agricultural workers, has raised concerns among farmers in the heavily agricultural Imperial Valley about the future stability of their workforce.
  • A federal judge has ordered the Department of Homeland Security to testify this Monday, June 23, regarding a recent courthouse arrest and its broader policies around arrests in court settings. The case may lead to class-action status and aims to halt such practices.

OTHER DEVELOPMENTS

• ​​​​​​On Tuesday, a federal judge ruled that the Environmental Protection Agency cannot terminate the $600 million Thriving Communities Grantmaking Program.
  • The International Community Foundation had been stewarding $48 million of those funds locally under the Inflation Reduction Act, supporting work on housing, pollution, clean water access, extreme heat mitigation, and more.
• On June 10, the U.S. Commerce Department eliminated three key census advisory committees via a Federal Register notice: the 2030 Census Advisory Committee, the Census Bureau National Advisory Committee on Racial, Ethnic, and Other Populations, and the Bureau of the Census Scientific Advisory Committee. The action followed Executive Order 14217, “Commencing the Reduction of the Federal Bureaucracy.”
  • Census data determines congressional representation, federal funding distribution, and demographic understanding of communities.
  • During Census 2020, San Diego and Imperial Counties received about $5 million from public and private funders to support a complete and accurate count.
• On June 14th, more than 2,000 “No Kings” protests took place nationwide. People gathered in a dozen locations across San Diego and Imperial Counties, with an estimated 60,000 people marching in downtown San Diego.
  • That same day, the Trump Administration held a military parade in Washington, DC to commemorate the Army’s 250th anniversary.
• The Supreme Court upheld a Tennessee law banning gender-affirming care for minors, ruling that because the law bans all gender transition care – rather than targeting a specific group – it does not constitute discrimination. However, the Court left open questions regarding laws specifically aimed at people who are transgender. Cases involving restrictions on transgender military service and other policies are expected to reach the courts in the coming year.

TAKEAWAYS: What Philanthropy Can (and Is!) Doing

In times of uncertainty, there is strength in connection and power in coming together with a shared purpose. Across the Catalyst network, funders are meeting the moment — responding to uncertainty with clarity, compassion, and collaboration. You can join them by taking the following steps:

• Contribute to the San Diego Resilient Response Fund, which provides support to organizations adapting to circumstances caused by federal policy and funding shifts. Funds are available to consult experts, build collaborative efforts, or host strategic conversations.
• Join the Coordinated Regional Response Collaborative, now with 26 members. This group of funders shares strategies, learns from one another about navigating uncertainty in the current landscape, and works together to maximize impact across the region.
• Contact us about contributing to a soon-to-be-announced Bridge Fund, which will provide operating capital to organizations with guaranteed future funding, but work that has to happen now.
• Learn about the San Diego Solidarity Network, a regional coalition of nonprofit and mutual aid organizations, cultural workers, movement builders, policy advocates, and community leaders–– and discover how you can get involved.
  • Catalyst joined the San Diego Solidarity Network at a press conference this week to share how philanthropy is contributing to the region’s response after the Network declared a state of civic emergency.

RESOURCES

• The Bay Area Economic Institute’s new report details the economic impact of mass deportations in California.
• The Nonprofit Finance Fund has released its 2025 State of the Nonprofit Sector Survey. Take a look to learn what challenges the nonprofit sector is facing and what concerns are top of mind.
• The Defending Equity Initiative provides pro bono services to nonprofits experiencing politically motivated attacks.
• The Democracy Protection Network has several resources on how to prepare your organization for politicized government investigations, and also provides technical assistance.

Talk to you soon,

Megan Thomas
President & CEO
Catalyst of San Diego & Imperial Counties