The Scoop
The Committee to Protect Journalists, the US-based press freedom charity, has directed a British law firm to set up a legal entity in the UK, in part as a precautionary measure against potential Trump administration executive orders targeting American nonprofits.
CPJ is far from alone: UK law firms have reported a surge in US-based nonprofits inquiring about creating legal entities in Britain, either to begin shifting their operations and funds abroad or as a precautionary step, while charity advisers and consultants said nonprofits were considering other countries including Belgium, France, and the Netherlands.
While many have long sought to expand their operations abroad, viewing London as a natural initial destination, their efforts have been accelerated by fear of what may be coming in Washington.
Know More
CPJ’s board discussed and approved the move to create a UK legal entity during a special meeting in April, a spokesperson told Semafor, but has not yet finalized the form that the charity’s legal entity will take.
The decision was partly driven by a long-term desire to expand CPJ’s fundraising efforts outside the US, the spokesperson noted, but reports that the White House is considering executive orders targeting a raft of nonprofits — including those focus on media freedoms, the environment, and international development — were also a factor: “The actions of the new administration [have] certainly focused our minds as a nonprofit based in the United States,” CPJ Chief Executive Jodie Ginsberg said.
Trump’s political adversaries have also been stunned by the speed and ferocity with which the administration has sought to crack down on nonprofits and international development organizations he sees as linked to Democrats or the left: Along with the shuttering of most USAID programs as well as the overseas aid agency itself, the White House also weighed executive orders that would strip US-based environmental groups of their tax-exempt status, according to Bloomberg, viewing them as opposed to the administration’s push to expand fossil fuel production. And it has explored ways to change the rules by which nonprofits obtain tax-exempt status, The Wall Street Journal reported last month.
Jonathan Brinsden, a partner focused on charities and nonprofits at the London law firm Broadfield, said that in the last six weeks, he had offered initial legal advice to approximately a dozen US-based nonprofits looking to set up UK entities, compared to one such inquiry in the three months prior. The charities were largely related to ESG causes and international development, he said.
“I’ve talked to some CEOs of charities who talk about being a frog in the pan, and becoming comfortable with risk, not really appreciating that the temperature is moving in one direction,” Brinsden said. “It’s not a unique situation,” he added, referencing the politicization of charities in the UK, “but like everything in the US, the volume is a lot louder.”
Notable
- The UK’s charity regulator benefits from being “more predictable and collaborative” than its US counterpart, Brinsden noted in a post for his firm.
- NGOs aren’t the only organizations being targeted: Elite universities are also in the Trump administration’s crosshairs, with the authorities mounting an array of challenges to their funding model, as Semafor’s Liz Hoffman notes.