Trump’s Tariffs and the Nonprofit Sector: What You Need to Know Now

Introduction

President Trump’s tariffs—ranging from 10% on imports to over 145% on targeted goods—are creating unprecedented challenges for nonprofits. Rising costs for essentials, like medical supplies and vehicles, are squeezing tight budgets. Inflation and fewer donations also add to the strain. Legal uncertainties make things worse. But within crisis lies opportunity.

By reading this article, you’ll gain:

·        Cost-mitigation strategies to offset tariff-driven price hikes.

·        Advocacy frameworks to influence policy and secure exemptions.

·        Proven tools to diversify revenue and stabilize operations.

This guide offers practical steps. It shows how food banks can change supply chains. Also, it explains how nonprofits can use online fundraising. These actions help turn challenges into opportunities.

Jessica Ferrell from a Kansas food pantry says, “We’re finding creative ways to do more with less—our community depends on it.” If you lead or support a nonprofit, these ideas can help you safeguard your mission and boost your impact.

How Tariffs Are Squeezing Nonprofits: Costs, Donors, and Legal Risks

President Trump’s tariffs are creating a triple threat for nonprofits: rising operational costs, shrinking donations, and legal uncertainty. Here’s how these challenges manifest—and how to combat them.

1. Rising Operational Costs

Tariffs act as hidden taxes on essential goods. In 2018, steel tariffs raised construction costs by 8% (Federal Reserve). This made housing nonprofits delay shelter expansions. Medical nonprofits are under pressure too. A 25% tariff on Chinese-made syringes and PPE has increased costs for free clinics.

These clinics already run on very tight budgets.

"Nonprofits are spending more on essentials like medical gloves and building materials. This cuts into their funds for programs," says Tim Delaney, CEO of the National Council of Nonprofits.

Actionable Step:

Audit your supply chain for tariff-exposed items (e.g., electronics, vehicles) and switch to domestic or tariff-exempt suppliers.

2. Donor and Funding Pressures

Inflation driven by tariffs is reducing disposable income, leading to fewer donations. A 2023 survey by the Nonprofit Finance Fund found that 65% of nonprofits faced more demand for services. However, 40% reported a drop in donors.

Food banks face tough challenges. For example, the Community Food Bank of Southern Arizona experienced a 15% drop in individual donations as grocery prices rose

Corporate sponsors are also pulling back. Grassia Advisors, a nonprofit consultancy, says that companies hit by tariff costs are reducing charitable budgets to safeguard profits.

Actionable Step:

Launch micro-donation campaigns (e.g., $5/month via social media) to engage younger, inflation-resistant donors.

3. Legal and Compliance Risks

The New Civil Liberties Alliance (NCLA) is suing the administration. They argue that Trump’s tariffs go beyond what the president can do. While litigation could delay enforcement, nonprofits must still navigate:

• Customs delays for imported goods, risking program disruptions.

• Budget instability from unpredictable duty hikes.

  
  

Case Study:

A Midwest food bank abandoned a $50,000 shipment of canned goods due to sudden tariff costs, forcing it to reduce meal services.

Actionable Step:

Partner with legal clinics (e.g., probono.org) to secure free help with customs compliance and tariff exemptions.

4. Global Aid Complications

Nonprofits operating internationally face added hurdles. Canadian charities importing U.S. medical supplies now face a 25% increase in costs. This rise is due to retaliatory tariffs, as reported by Imagine Canada, a national nonprofit alliance.

Actionable Step:

Lobby for exemptions on humanitarian goods by joining coalitions like the Charity Defense Council.

Key Takeaway

Tariffs demand proactive adaptation. As Tim Delaney emphasizes, “Nonprofits must innovate to survive—this means rethinking supply chains, donors, and advocacy.”

Case Studies: Nonprofits Adapting to Tariff Pressures

1. Center of Grace (Kansas)

Facing a 30% surge in food costs due to tariffs on imported canned goods, this community hub relaunched its food pantry after a decade-long hiatus. Executive Director Jessica Ferrell shifted to local farms for fresh produce, reducing reliance on tariff-hit imports.

• Result: Served 200+ families monthly while cutting costs by 15%.

• Lesson: “Local partnerships are a lifeline when global markets fail,” says Ferrell.

  
  

2. Horton’s Kids (Washington, D.C.)

This youth nonprofit saw meal program costs jump 20% as tariffs inflated prices for staples like pasta and canned vegetables. They responded by:

• Partnering with urban gardens to grow fresh ingredients.

• Launching a “Sponsor a Meal” campaign, securing $50,000 in micro-donations via Instagram.

• Creativity is your currency.

  
  

3. Canadian Nonprofits

Retaliatory tariffs on U.S. medical supplies forced Canadian health charities to pay 25% more for syringes and PPE. Imagine Canada, a national alliance, negotiated bulk purchases with European suppliers, saving members $1.2 million annually.

• Actionable Step: Join cross-border coalitions to leverage collective buying power.

  
  

4. Legal Advocacy in Action

The New Civil Liberties Alliance (NCLA) is challenging tariffs’ legality, arguing they harm charities. As litigation continues, nonprofits like Midwest Food Bank use CustomsNow’s AI tools. These tools help them automate tariff classifications and avoid fines for misclassification.

• Result: Reduced compliance costs by $15,000/year.

• Takeaway: “Technology turns chaos into control,” says CFO Linda Thompson.

  
  

Key Insight

These stories prove that agility beats adversity. Nonprofits are changing how they survive. They source locally, digitize compliance, and lobby together

Strategic Solutions for Nonprofits: Turning Tariff Challenges into Opportunities

Tariffs push for innovation, but nonprofits can adapt well. They use creativity and community-focused strategies. Below are proven methods to mitigate costs, diversify revenue, and build long-term resilience.

1. Financial Adaptation: Smarter Budgeting and Funding

A. Cost Mitigation

• Local Sourcing:

  • Example: A Michigan homeless shelter partnered with nearby farms for fresh produce, cutting food costs by 20% and bypassing tariffs on imported goods.

  • Tool: Use LocalHarvest.org to find regional suppliers.

• Bulk Purchasing:

  • Collaborate with neighboring nonprofits to negotiate discounts. Grassia Advisors reports that bulk buying reduces costs by 10–15% for small nonprofits1.

  • Case Study: Three Arizona food banks pooled funds to buy canned goods in bulk, saving $8,000 monthly.

B. Diversify Revenue Streams

• Fee-for-Service Models:

  • Offer paid workshops (e.g., financial literacy or job training) to offset lost grants. Nonprofit Tech for Good found that 35% of nonprofits now use earned income to fund programs.

  • Example: A Chicago arts nonprofit charges $50/head for grant-writing seminars, generating $30,000 annually.

• Micro-Donations:

  • Use social media to attract small, recurring gifts. The Nonprofit Finance Fund notes that 60% of Gen Z donors prefer giving $5–$10 monthly via apps like Venmo.

  • Actionable Step: Create a TikTok campaign with a “$5 Feeds a Family” hashtag to engage younger donors.

    
    

2. Operational Resilience: Supply Chain and Tech Tools

A. Supply Chain Adjustments

• Diversify Suppliers:

  • Shift sourcing to countries like Vietnam or Mexico to avoid China tariffs. ThomasNet.com helps identify low-tariff suppliers.

  • Example: A D.C. education nonprofit switched to Mexican-made laptops, saving $12,000/year on tariffs.

• Inventory Management:

  • Use TradeGecko to track tariff-influenced pricing and optimize orders.

  • Quote: “Automating inventory cuts human error and costs,” says Linda Thompson, CFO of Midwest Food Bank.

B. Tech-Driven Efficiency

• AI Compliance Tools:

  • Platforms like CustomsNow classify imports under Harmonized Tariff Codes, avoiding misclassification fines.

  • Result: A Florida medical nonprofit reduced compliance costs by $20,000 annually.

• Digital Fundraising:

  • Adopt NeonOne for peer-to-peer campaigns and donor management.

  • Case Study: A Boston animal shelter raised $50,000 in 6 weeks via a NeonOne-powered “Virtual Adoption Day.”

    
    

3. Advocacy and Collaboration: Strength in Numbers

A. Policy Engagement

• Lobby for Exemptions:

  • Join the National Council of Nonprofits to push for tariff waivers on humanitarian goods.

  • Example: The Charity Defense Council secured exemptions for medical supplies in 2022 by testifying before Congress.

• Public Comments:

  • Submit feedback during U.S. Trade Representative (USTR) tariff reviews. Grassia Advisors provides templates for effective comments.

B. Corporate Partnerships

• ESG Alignment:

  • Pitch corporations on funding programs that align with their Environmental, Social, and Governance (ESG) goals.

  • Example: A climate nonprofit secured $100,000 from a solar company by co-branding a “Green Communities” initiative.

• In-Kind Support:

  • Request donated goods (e.g., laptops or vehicles) to offset tariff-inflated purchase costs.

4. Community-Centric Responses

A. Volunteer Mobilization

• Skilled Volunteers:

  • Recruit pro bono lawyers to navigate tariff codes or accountants to restructure budgets.

  • Tool: Taproot Plus matches nonprofits with skilled volunteers.

B. Transparent Communication

• Donor Messaging:

  • Explain how tariffs impact your mission. Example: “A 25% tariff on medical supplies means we need $10,000 more to serve 500 patients. Can you help?”

  • Result: A New York health nonprofit saw a 30% donor increase after sending targeted emails.

    
    

Key Takeaway

“Nonprofits thrive by turning obstacles into innovation,” says Tim Delaney, CEO of the National Council of Nonprofits. Diversifying revenue, automating compliance, and working together can help your organization not just survive tariffs but also come out stronger

Long-Term Outlook: Policy Reforms and Nonprofit Resilience

The tariff landscape is still unstable. However, nonprofits can influence their futures by using advocacy and strategic planning. Here’s what to expect—and how to prepare:

Economic Projections

• Recession Risks: The National Bureau of Economic Research says long-lasting tariffs might slow GDP growth by 0.5–1% each year. This could lead to less charitable giving and fewer federal grants.

• Sector-Specific Threats: Nonprofits in healthcare, education, and housing are at high risk. This is due to their reliance on imported goods and donors who are sensitive to inflation.

  
  

Policy Recommendations

1. Tariff Exemptions for Humanitarian Goods:

   • Lobby Congress to exclude medical supplies, educational materials, and food from tariffs. The Charity Defense Council successfully exempted PPE in 2022—a model to replicate.

2. Expand SBA-Style Loan Programs:

   • Advocate for nonprofit-specific loans with low interest rates to cover tariff-related costs.

3. Strengthen Cross-Border Coalitions:

   • Partner with global alliances like Imagine Canada to negotiate bulk purchases and share legal resources.

     
     

Nonprofit Adaptation Strategies

• Endowment Protection: Shift investments to inflation-resistant assets (e.g., real estate or green energy funds).

• Scenario Planning: Stress-test budgets for 5–10% annual cost increases using tools like BudgetBakers.

• Advocacy Training: Equip staff with lobbying skills through workshops from Independent Sector.

“Policy change starts locally. Meet with your representatives quarterly to share how tariffs hurt your community,” urges Tim Delaney, CEO of the National Council of Nonprofits

Conclusion

President Trump’s tariffs have put nonprofits in a tough spot. Rising supply costs and pressure from donors are threatening their missions. Yet, as this article demonstrates, adversity sparks innovation. Nonprofits can turn challenges into growth by adapting strategically. They can bring supply chains back home, use tools like CustomsNow for compliance, and promote teamwork across sectors.

The path forward demands agility and unity:

• Diversify revenue through micro-donations and fee-for-service models to offset tariff-driven inflation.

• Partner locally with suppliers and nonprofits to bypass import costs and build community resilience.

• Lobby collectively for policies that exempt humanitarian goods, leveraging coalitions like the Charity Defense Council.

  
  

As Sean Kosofsky, nonprofit strategist and author, emphasizes, “Nonprofits are inventors—we make something new out of nothing every day." Jessica Ferrell of a Kansas food pantry adds: “Creativity is our currency when budgets shrink and needs grow.”

Your Move: Audit your supply chain this month to identify tariff-exposed items. Join advocacy groups to amplify your voice. Share how your nonprofit is innovating—whether through AI-driven compliance or grassroots partnerships. Together, we can turn tariffs into catalysts for stronger, more sustainable communities.