By THALIA BEATY, Associated Press

Two Republican senators and a broad bipartisan coalition of funders and nonprofits prevented a 600% increase in taxes levied on the endowments of the largest private foundations as part of President Donald Trump’s the tax and spending legislation.

Thanks to their support, when Trump signed the bill into law on July 4, taxes went up on the endowments of the largest universities, but not on the endowments of philanthropic foundations.

“I do have to say that this took some persuasion,” said Sen. Todd Young of Indiana in an interview with The Associated Press. The other champion was Sen. James Lankford of Oklahoma, who did not respond to an interview request.

Together, they advocated to remove the provision which, at the high end, would levy a tax of 10% on the investment earnings of foundations with more than $5 billion in assets, up from the current rate of 1.39%.

The move reveals both the power of philanthropic groups, especially conservative ones, to sway legislators and a split in the administration’s coalition between those who want to protect the independence of private philanthropy and those who think the sector supports resistance to the president’s agenda.

Backing of Republican senators and conservative groups was key

Young said he spoke with leaders or representatives of a dozen foundations in his state to understand what it would mean to increase these taxes on foundation endowments.

Though Young didn’t name any specific leaders, Indiana is home to numerous major foundations — including one of America’s largest foundations, the Lilly Endowment, which holds shares in the pharmaceutical company Eli Lilly and reported assets of almost $80 billion at the end of last year. The Associated Press receives funding from the Lilly Endowment for its coverage of philanthropy and religion.

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Young said many in the Republican caucus appreciate the value of the investments private foundations make in their communities.

“Let’s be honest here. The target of this excise tax increase was not the vast majority of private foundations. It was a handful of large foundations that are nationally known that have been accused of embracing and perpetuating certain woke policies and agendas,” Young said.

While he didn’t specify the specific foundations, Young was tapping into a critique of large progressive foundations brought by politicians like Vice President JD Vance. In a 2021 speech at the conservative think tank The Claremont Institute, Vance attacked foundations who fund movements for social justice and characterized their support for Black Lives Matter groups as “investing in racial division.”

“We should eliminate all of the special privileges that exist for our nonprofit foundation class,” Vance said at the time. “If you’re spending all your money to teach racism to our children in their schools, why do we give you special tax breaks instead of taxing you more?”

The White House has generally expressed support for that policy view. In an early executive order, Trump asked the attorney general to identify large foundations to investigate for civil rights violations, along with large corporations and universities. So far, the administration has not announced any investigations into foundations, even as the deadline included in the executive order has passed.

Conservative philanthropic groups added their voice to oppose the proposed increase in taxes on foundations’ endowment earnings. The Philanthropy Roundtable, which said it supports conservative and free market ideas, led a coalition to send a letter to Senate majority leader Sen. John Thune of Montana and Sen. Mike Crapo of Idaho, who leads the Senate Finance Committee.

“We know policies that siphon private dollars away from charities to line the government’s coffers are antithetical to conservative values,” the signatories wrote of the proposed tax on foundation assets.

Other provisions include a charitable deduction but also new limits on company giving

The legislation also contains a mix of provisions that impact funders, nonprofits and communities. It allows the vast majority of tax filers to take a charitable deduction of up to $1,000 for individuals and $2,000 for married couples, which advocates believe will increase the amount everyday donors give.

The law also moved forward with a new cap on itemized deductions for the wealthiest tax filers, which advocates think will deter charitable giving. It also creates a new requirement for corporations to donate a minimum of 1% of their taxable income before receiving a tax benefit. Many corporations do not meet that threshold, meaning they may be discouraged from giving at all.

United Philanthropy Forum is a membership organization for foundations, which has long advocated around issues important to the sector. Besides the recent spending bill, they’ve followed executive orders, provisions that would have threatened the tax-exempt status of organizations and cuts to social safety net programs.

Matthew L. Evans, the forum’s vice president of advocacy and external relations, said the forum shifted their strategy several years ago away from defending the interests of the sector to advocating for the communities which private philanthropy serves.

“It really is an all hands on deck moment because again this is such an unprecedented time for us,” Evans said.

The forum was part of a coalition of nonprofit associations that helped organize a letter pushing back on multiple provisions in the spending bill, which almost 3,000 nonprofits signed on to support.

But one of the most important messages nonprofit advocates were delivering to lawmakers was around the impacts of cuts to social safety net programs, said Kyle Caldwell, who leads the Council of Michigan Foundations. He said his organization has advocated for foundations and the communities they serve in Michigan for decades.

“If you think about all of the systems that were in place: access to health care, access to education, access to food. All of those really were targeted services to the most vulnerable in our community. That’s where philanthropy invests most. That’s where nonprofits act most,” he said, adding that the cuts will “put higher demands on the nonprofit sector, which was already overburdened.”

When asked about concerns over the impact of the cuts, Senator Young from Indiana said he thinks the bill strikes the right balance.

“What we have found is that when the economy grows, people give more because they to have more to give,” Young said.

Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

By CHRISTOPHER RUGABER and JOSH BOAK, Associated Press

WASHINGTON (AP) — President Donald Trump says he has finally found a way to achieve his goal of removing Federal Reserve Chair Jerome Powell, accusing him of mismanaging the U.S. central bank’s $2.5 billion renovation project.

The push comes after a monthslong campaign by Trump to try to rid himself of the politically independent central banker, who has resisted the Republican president’s calls to slash interest rates out of concerns about the administration’s tariffs sparking higher levels of inflation.

Trump indicated Tuesday that Powell’s handling of an extensive renovation project on two Fed buildings in Washington could be grounds to take the unprecedented and possibly legally dubious step of firing him. “I think it sort of is,” Trump said.

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“When you spend $2.5 billion on, really, a renovation, I think it’s really disgraceful,” Trump said, adding that he never saw the Fed chair as someone who needed a “palace.”

The project has been underway for years, going back to Trump’s first term. But it only recently caught the White House’s attention. Trump maintains Fed rate cuts would lower the costs of government borrowing, while Powell has warned a premature rate cut could worsen inflation and ultimately raise those borrowing costs.

The risk of the Fed losing its political independence could undermine America’s financial markets, possibly leading to a meltdown in stocks and investors charging a premium to lend to the U.S. economy.

Here’s what to know:

Ousting Powell risks setting off market panic

The Fed chair has been an obstacle in Trump’s efforts to gain total control over the executive branch.

Powell and his board have the dual mandate of maximizing employment and keeping prices stable, a task that can require them to make politically unpopular moves such as raising interest rates to hold inflation in check. The general theory is that keeping the Fed free from the influence of the White House — other than for nominations of Fed officials — allows it to fulfill its mission based on what the economy needs, instead of what a politician wants.

An attempt to remove Powell from his job before his term ends in May 2026 would undercut the Fed’s long-standing independence from day-to-day politics and could lead to higher inflation, higher interest rates and a weaker economy.

FILE – Federal Reserve Board Chairman Jerome Powell arrives before a Senate Committee on Banking hearing, June 25, 2025, on Capitol Hill in Washington. (AP Photo/Julia Demaree Nikhinson, File)

The Supreme Court recently signaled that Trump can’t fire Powell simply because the president disagrees with him on interest rates. But legally he could do so “for cause,” such as misconduct or dereliction of duty.

Trump’s workaround appears to be that Powell misrepresented the renovation project in congressional testimony and that the cost is excessive, thus meriting his dismissal.

The Fed’s main headquarters is over 90 years old

The Fed says its main headquarters, known as the Marriner S. Eccles building, was in dire need of an upgrade because its electrical, plumbing and HVAC systems, among others, are nearly obsolete and some date back to the building’s construction in the 1930s.

The renovation will also remove asbestos, lead and other hazardous elements and update the building with modern electrical and communications systems. The H-shaped building, named after a former Fed chair in the 1930s and ’40s, is located near some of Washington’s highest-profile monuments and has references to classical architecture and marble in the facades and stonework. The central bank is also renovating a building next door that it acquired in 2018.

The Fed says there has been periodic maintenance to the structures but adds this is the first “comprehensive renovation.”

The renovation costs have ballooned over the years

Trump administration officials have criticized the Fed over the project’s expense, which has reached $2.5 billion, about $600 million more than was originally budgeted.

Like a beleaguered homeowner facing spiraling costs for a remodeling project, the Fed cites many reasons for the greater expense. Construction costs, including for materials and labor, rose sharply during the inflation spike in 2021 and 2022. More asbestos needed to be removed than expected. Washington’s local restrictions on building heights forced it to build underground, which is pricier.

In 2024, the Fed’s board canceled its planned renovations of a third building because of rising costs.

The Fed says the renovations will reduce costs “over time” because it will be able to consolidate its roughly 3,000 Washington-based employees into fewer buildings and will no longer need to rent as much extra space as it does now.

White House budget director calls renovations ‘ostentatious’

Russ Vought, the administration’s top budget adviser, wrote Powell a letter that said Trump is “extremely troubled” about the Fed’s “ostentatious overhaul” of its facilities.

The Fed’s renovation plans call for “rooftop terrace gardens, VIP private dining rooms and elevators, water features, premium marble, and much more,” Vought said in last week’s letter.

Powell has disputed the claims, which were given wide circulation in a paper issued by the Mercatus Center, a think tank at George Mason University, in March 2025. The paper was written by Andrew Levin, an economist at Dartmouth College and former Fed staffer.

“There’s no VIP dining room,” Powell said last month during a Senate Banking Committee hearing. “There’s no new marble. … There are no special elevators. There are no new water features. … And there’s no roof terrace gardens.”

Some of those elements were removed from initial building plans submitted in 2021, the Fed says.

But the White House also takes issue with the Fed reducing its renovation costs

The Fed’s changes to its building plans have opened it up to another line of attack: White House officials suggest the Fed violated the terms of the approval it received from a local planning commission by changing its plans.

In its September 2021 approval of the project, the National Capital Planning Commission said it “Commends” the Fed for “fully engaging partner federal agencies.” But because the Fed changed its plans, the administration is indicating it needed to go back to the commission for a separate approval.

Essentially, White House officials are saying Powell is being reckless with taxpayer money because of the cost of the renovation, but they are also accusing him of acting unethically by scaling back the project to save money.

James Blair, the White House deputy chief of staff whom Trump named to the commission, said in a post on X that Powell’s June congressional testimony “leads me to conclude the project is not in alignment with plans submitted to & approved by the National Capital Planning Commission in 2021.”

Speaking last Thursday at the planning commission meeting, Blair said he intends to tour the construction site, review materials from the Fed on how the approved 2021 renovation plans have changed and circulate a letter among his colleagues on the commission that would go to Fed officials.

The Fed has asked for an independent review of the project

The central bank says, in a series of frequently asked questions on its website, that it is “not subject to the direction” of the commission and has only complied with its directives voluntarily.

Instead, the Fed said it is accountable to the Senate and the House of Representatives and is overseen by an independent inspector general, not the White House. Powell has asked the inspector general to review the costs of the renovation project.

By SEJAL GOVINDARAO, Associated Press

PHOENIX (AP) — Adelita Grijalva won the Democratic primary Tuesday for a southern Arizona U.S. House seat long held by her father, the late U.S. Rep. Raúl Grijalva, one of the most senior and progressive power brokers on Capitol Hill.

Adelita Grijalva will face Daniel Butierez, a painting company owner who won the GOP primary, in a Sept. 23 special election for the seat in the heavily Democratic 7th Congressional District.

Raúl Grijalva’s death in March left the seat wide open for the first time in over two decades. Grijalva was a champion of environmental protections and reliably went to bat for immigrants and Native American tribes. He routinely breezed past GOP challengers in the deep-blue district, which stretches across most of the state’s border with Mexico, spanning six counties and parts of Tucson.

Adelita Grijalva dominated the field of Democratic hopefuls seeking the nomination. She said lowering the cost of living, standing up for immigrant rights, and protecting access to Medicaid, Medicare and Social Security are among her top priorities. Grijalva also racked up a lengthy list of heavyweight endorsements — including Democratic U.S. Rep. Alexandria Ocasio-Cortez, independent U.S. Sen. Bernie Sanders and several state and local officials.

“This is a victory not for me, but for our community and the progressive movement my dad started in Southern Arizona more than 50 years ago,” Grijalva said in a statement.

Butierez, who captured more than one third of the vote against Raúl Grijalva last year, also easily clinched his party’s nomination, winning every county by large numbers. He said he’s excited by the results and more optimistic about his chances this go-around because he’s been actively campaigning and he believes he can win over more Democrats in the district.

Daniel Butierez, who is seeking the Republican nomination in the race to replace the late Rep. Raúl Grijalva in Arizona’s 7th Congressional District, talks to reporters while awaiting results Tuesday, July 15, 2025, in Tucson, Ariz. (Kelly Presnell/Arizona Daily Star via AP)

“The biggest thing is, I’m not running to represent just the Democrats or just the Republicans. I’m running to represent everybody,” he said.

If Adelita Grijalva wins the general election, she would be the first Latina to represent Arizona in Congress.

“In a district that is 60 percent Hispanic, it is critical that voters see themselves in their representatives, and Adelita is the fighter they need in Congress,” said Rep. Linda Sánchez, chair of BOLD PAC, the Hispanic Caucus’ campaign organization.

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Grijalva has also pushed back against notions that she’s an establishment candidate and has pointed to her own credentials serving on local governing boards.

She ran against former state lawmaker Daniel Hernandez; digital strategist and reproductive rights advocate Deja Foxx; Indigenous activist and scholar Jose Malvido Jr.; and retired health care executive Patrick Harris Sr. Grijalva led her next closest rival, Foxx, by about 40 percentage points when The Associated Press declared her the winner.

In the GOP primary, Butierez ran against off-road vehicle businessman Jimmy Rodriguez and restaurant owner Jorge Rivas.

The results of Tuesday’s primary will remain unofficial until they are certified on July 31 by the Arizona Secretary of State’s office.

The seat will not decide control of the U.S. House, but it is one of three vacancies in heavily Democratic districts that, when filled in special elections this fall, will likely chip away at Republicans’ slender 220-212 majority in the chamber.

Democrats have a nearly 2-1 ratio registration advantage over Republicans in the 7th District.

By GERALD IMRAY and MICHELLE GUMEDE, Associated Press

CAPE TOWN, South Africa (AP) — The United States has sent five men to the small African nation of Eswatini in an expansion of the Trump administration’s largely secretive third-country deportation program, the U.S. Department of Homeland Security said Tuesday.

The U.S. has already deported eight men to another African nation, South Sudan, after the Supreme Court lifted restrictions on sending people to countries where they have no ties. The South Sudanese government has declined to say where those men are after they arrived nearly two weeks ago.

In a late-night post on X, Homeland Security Assistant Secretary Tricia McLaughlin said the men sent to Eswatini, who are citizens of Vietnam, Jamaica, Cuba, Yemen and Laos, had arrived on a plane, but didn’t say when or where.

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She said they were all convicted criminals and “individuals so uniquely barbaric that their home countries refused to take them back.”

The men “have been terrorizing American communities” but were now “off of American soil,” McLaughlin added.

McLaughlin said they had been convicted of crimes including murder and child rape and one was a “confirmed” gang member.

Like in South Sudan, there was no immediate comment from Eswatini authorities over any deal to accept third-country deportees or what would happen to them in that country. Civic groups there raised concerns over the secrecy from a government long accused of clamping down on human rights.

“There has been a notable lack of official communication from the Eswatini government regarding any agreement or understanding with the U.S. to accept these deportees,” Ingiphile Dlamini, a spokesperson for the pro-democracy group SWALIMO, said in a statement sent to The Associated Press. “This opacity makes it difficult for civic society to understand the implications.”

It wasn’t clear if they were being held in a detention center, what their legal status was or what Eswatini’s plans were for the deported men, he said.

An absolute monarchy

Eswatini, previously called Swaziland, is a country of about 1.2 million people between South Africa and Mozambique. It is one of the world’s last remaining absolute monarchies and the last in Africa. King Mswati III has ruled by decree since 1986.

FILE – Eswatini’s King Mswati III addresses the Climate Action Summit in the United Nations General Assembly at U.N. headquarters, Sept. 23, 2019. (AP Photo/Jason DeCrow, File)

Political parties are effectively banned and pro-democracy groups have said for years that Mswati III has crushed political dissent, sometimes violently. Groups like SWALIMO have called for democratic reforms.

Pro-democracy protests erupted in Eswatini in 2021, when dozens were killed, allegedly by security forces. Eswatini authorities have been accused of conducting political assassinations of pro-democracy activists and imprisoning others.

Because Eswatini is a poor country with a relative lack of resources, it “may face significant strain in accommodating and managing individuals with complex backgrounds, particularly those with serious criminal convictions,” Dlamini said.

While the U.S. administration has hailed deportations as a victory for the safety and security of the American people, Dlamini said his organization wanted to know the plans for the five men sent to Eswatini and “any potential risks to the local population.”

US is seeking more deals

The Trump administration has said it is seeking more deals with African nations to take deportees from the U.S. Leaders from some of the five West African nations who met last week with President Donald Trump at the White House said the issue of migration and their countries possibly taking deportees from the U.S. was discussed.

Some nations have pushed back. Nigeria, which wasn’t part of that White House summit, said it has rejected pressure from the U.S. to take deportees who are citizens of other countries.

The U.S. also has sent hundreds of Venezuelans and others to Costa Rica, El Salvador and Panama, but has identified Africa as a continent where it might strike more deals.

Rwanda’s foreign minister told the AP last month that talks were underway with the U.S. about a potential agreement to host deported migrants. Last year, the U.K. Supreme Court ruled a British government plan announced in 2022 to deport rejected asylum-seekers to the East African nation of Rwanda was illegal.

‘Not a dumping ground’

The eight men deported by the U.S. to war-torn South Sudan, where they arrived early this month, previously spent weeks at a U.S. military base in nearby Djibouti, located on the northeast border of Ethiopia, as the case over the legality of sending them there played out.

The South Sudanese government has not released details of its agreement with the U.S. to take deportees, nor has it said what will happen to the men. A prominent civil society leader there said South Sudan was “not a dumping ground for criminals.”

Analysts say some African nations might be willing to take third-country deportees in return for more favorable treatment from the U.S. in negotiations over tariffs, foreign aid and restrictions on travel visas.

Gumede reported from Johannesburg.