Since beginning his second term on January 20, 2025, President Trump has signed 210 executive orders (EOs). [1] While the EOs have varying targets and apply to a span of industries, one overarching goal has been to dismantle diversity, equity, and inclusion (DEI) initiatives. From altering hiring practices to canceling programs that benefit low-income individuals, people of color, and other disadvantaged groups, these EOs have forced large corporations, law firms, and universities to make changes. [2] But these attempts to eliminate DEI efforts have had harmful effects on small-to-medium-sized nonprofits too. Most nonprofits rely on federal funding to operate, and many others exist exclusively to promote DEI, leaving them especially vulnerable to these attacks on DEI. [3] This blog post discusses the negative repercussions of these federal funding cuts on Michigan-based nonprofits and briefly describes some strategies these organizations can implement to navigate these challenges. ...
Building Financial Sustainability Without Mission Drift: Choosing the Right Strategy for Mission and Profit
More nonprofits and mission-driven businesses are looking for ways to stay financially sustainable without drifting from their mission. Many are turning to social enterprise strategies to access more financing sources besides grants and donations. Social enterprise generally refers to adopting hybrid business models: structures that allow organizations to earn revenue and stay true to their mission. These strategies can take many legal forms, including: Forming mission-driven for-profit entities (or hybrid entities) like Low-Profit Limited Liability Companies (L3Cs) and Benefit Corporations ; · Traditional 501(c)(3) charitable nonprofits and 501(c)(4) social welfare organizations, or a nonprofit’s subsidiary Structures like fiscal sponsorship This post gives an overview of these options. Low-Profit Limited Liability Companies ( L3Cs) An L3C is a for-profit LLC designed specifically for social impact...