Editors’ Note: Ellen Aprill explains why the hybrid nature of the United States Institute of Peace (USIP), both a government and nonprofit entity, was at the heart of the standoff between Department of Government Efficiency (DOGE) and USIP officials earlier this week.

The United States Institute of Peace (USIP) is the latest target of President Trump and DOGE. On Friday March 14  President Trump ousted the USIP board members who had been appointed by President Biden and who constituted a majority of the board. On Monday March 17, DOGE staffers, with the aid of armed police, took over USIP’s office and removed several employees from the building. The next day, USIP and five of its ousted board members filed a suit challenging these actions, and the day after, US District Judge Beryl Howell denied the requested temporary restraining order, although she sharply criticized the methods DOGE used to take over USIP offices.

Besides reflecting the obvious irony of an armed stand-off at a venue dedicated to promoting conflict resolution, these events also offer a lesson that aspects of our governing institutions are more complicated than Congress, the President, and the courts acknowledge. In denying the requested temporary restraining order, Judge Howell noted that it was a “very complicated entity.” She worried whether USIP is an independent agency or whether it falls under the executive branch, with USIP arguing the former and lawyers for the government arguing the latter. USIP is neither—and both. It is a charitable-governmental hybrid. And it is its hybrid nature that muddles determinations regarding the President’s power to remove its board members.

Charitable-governmental hybrids are in fact more common than is generally recognized, as I explained in a 2023 article (and outlined in this HistPhil post). Examples include the American National Red Cross, the National Gallery of Art, the Holocaust Museum, the Corporation for Public Broadcasting, and the Legal Services Corporation. Their legal status is complicated and often uncertain. Congress in creating these entities has failed to consider such uncertainties and complications. In the case of USIP, the President and his administration have also ignored the complications and uncertainties involved in its status. Supreme Court jurisprudence as to the President’s removal power also fails to address the complex nature of such hybrids. The example of USIP instructs that all three branches need to take this category of entities into account. As Stanford legal scholar Anne Joseph O’Connell has observed, “the reality of the administrative state is more complex” than “[t]he traditional view of a bureaucracy consisting entirely of executive agencies under the control of the President as well as regulatory commissions and boards that are more independent of the White House.”

USIP, established in 1984, is one of these many Congressionally chartered nonprofits. The statute [22 USC 4603(b)] establishing it states: “The institute is an independent nonprofit corporation and an organization described in section 170(c)(2)(B) of Title 26.” Section 170(c)(2)(B) is the provision of the Internal Revenue Code describing certain entities contributions to which are eligible for a charitable deduction. USIP does not in fact receive charitable contributions because another subsection permits USIP to establish the “Endowment of the United States Institute for Peace.” It did so in 1989, and the Endowment’s 2022 Form 990 shows over $6,000,000 in government grants and other contributions, grants, and gifts.

What I wish to emphasize, as probably only a tax lawyer would, is that section 170(c)(2), which largely tracks the better-known section 501(c)(3), lists private entities—and only private entities. A different subsection, section 170(c)(1), permits deductible contributions to “[a] State, a possession of the United States, or any political subdivision of the foregoing, or the United States or the District of Columbia.” That is, the statute establishing USIP places it clearly as a private, not government, entity.

Although an independent nonprofit corporation, USIP also has many governmental aspects. The make-up of its 15 board members is specified by statute [22 USC 4605(b)]: the Secretary of State (or designate), the Secretary of Defense (or designate), the President of the National Defense University (or designate), and “twelve individuals appointed by the President, by and with the advice and consent of the Senate.” It is subject to the Freedom of Information Act, a fact on which the government lawyers relied in arguing it is an executive agency. Another provision states that its officers and employees will be considered officers and employees of the federal government for certain specified purposes.

Of governmental-charitable hybrids that are established as nonprofits by Congress but exhibit some indicia shared with government agencies, the Smithsonian Institution is probably the best known and oldest, having been founded in 1846. It illustrates well the complex issues they present. As I discuss in my article, the Smithsonian describes itself as a “trust instrumentality of the United States” and “unique in the Federal establishment” because it is “not an executive branch agency” or “an agency or authority of the Government.” Unlike many other governmental-charitable hybrids, it relies primarily on appropriations. Some hybrids receive little if any funding through appropriations; others get at least some of their support through appropriations. The Office of Legal Counsel of the Department of Justice has called the Smithsonian a “historical and legal anomaly” that is distinct from the three constitutional branches although “the precise nature of that relationship . . . is the subject of some disagreement.” As a result, administrative judicial opinions have held that some laws, including the Federal Tort Claims Act and the Federal Property and Administrative Services Act, apply to it. But the Office of Legal Counsel has concluded that the Smithsonian is not covered by the Freedom of Information Act, the Federal Advisory Act, or the Administrative Procedure Act.

Why would Congress establish such hybrids? Of course, it is difficult to know Congressional purpose and the motives of various of its members will differ. I suspect, however, that in setting up these hybrids, Congress found the siren call of bespoke entities, blessed by its own legislative action, irresistible. Such organizations, for example, are free to fundraise as they choose, which government agencies cannot. Only some administrative agencies can accept charitable gifts at all. Even those that can, however, do not have the ability of these hybrids to hire fundraising consultants, engage in fundraising campaigns, seek crowdfunding, or invest charitable proceeds as they see fit.

In addition, for the most part these hybrids are not subject to the salary limits applicable to government employees and thus can offer competitive salaries. Unlike government agencies, these hybrids can make longtime use of volunteers. Even those that receive government appropriations, such as the Corporation for Public Broadcasting, escape the constraints of the Antideficiency Act, the Purpose Statute, and the Bona Fide Needs Statute, all of which place limits on the use of appropriations. At the same time, Congress in the hybrid’s charter can pick and choose which laws applicable to government agencies will apply to them as well. The provision applying the Freedom of Information Act to USIP is one example. But, as the many disputes involving the Smithsonian demonstrate, Congress generally fails to make decisions in the charter as to all of the possible acts that might or might not apply. That is, the Congressional charters for these hybrid entities almost always leave gaps that create uncertainties.

The Kennedy Center offers a useful comparison to USIP because it is another recent example involving the authority of the President to remove the governing board of bespoke, governmental-charitable entities. The John F. Kennedy Center Amendments of 1994 describes it as “an entity within the federal government structure,” albeit a “unique” one. It is subject to a number of provisions applicable to government agencies. It is a “federal entity” under the Inspector General Act, an agency with authority to publish regulations in the Federal Register, and a federal agency under the Federal Tort Claims Act. It is not, however, subject to the Civil Service pay scale; Deborah Rutter, its recently fired President and CEO, had compensation well in excess of $1million.

The Kennedy Center’s charter provides that its governing board is to consist of sixty members, twenty-four of whom are governmental officials, including the Secretary of Health and Human Services, the Librarian of Congress, the Secretary of State, the director of the National Park Service, the Secretary of Education, and various members of Congress. The remaining 36 board members are appointed by the President for a term of six years. In the case of The Kennedy Center, board members appointed by President Biden and removed by President Trump did not challenge their removal.

Importantly, however, the statutory provisions establishing the board membership of USIP differ from that of The Kennedy Center. Although Kennedy Center appointments specify a term of years, there are no statutory criteria specifying removal for cause.

In contrast, board members of USIP appointed by the President may be removed (56 USC 4605f) only:

(1) in consultation with the Board, for conviction of a felony, malfeasance in office, persistent neglect of duties, or inability to discharge duties;

(2) upon the recommendation of eight voting members of the Board; or

(3) upon the recommendation of a majority of the members of the Committee on Foreign Affairs and the Committee on Education and Labor of the House of Representatives and a majority of the members of the Committee on Foreign Relations and the Committee on Labor and Human Resources of the Senate.

To me, these provisions point to the heart of the issue as to USIP – whether, in connection with an entity explicitly established by Congress as “independent,” but also subject to some provisions designed for executive agencies, the President must abide by criteria for cause as specified by Congress or can do so at will. Currently, Supreme Court jurisprudence largely takes a binary approach. Under the authority of the 1926 Supreme Court opinion in Myers v. United States, the President has authority to remove officers of executive agencies without cause. In contrast, the Supreme Court in 1935 held in Humphrey’s Executor v. United States that the President may remove officers of independent agencies (the Federal Trade Commission in the case before the Court) only for cause as specified in the independent agency’s applicable legislation.

In 2020, the Court in Seila Law LLC v. Consumer Financial Protection Bureau constricted the holding of Humphrey’s Executor. It held that requiring that the President remove leadership of an independent agency led by a single individual only for cause violates the separation of powers. Quoting a 2010 case, the Court declined to extend Humphrey’s Executor to “a new situation not yet encountered by the Court.” It described the holding in Humphrey’s Executor and subsequent cases as limiting Presidential removal for cause to only two situations: “One for multimember expert agencies that do not wield substantial executive power, and one for inferior officers with limited duty and no policymaking or administrative authority.”

A hybrid governmental-charitable entity such as USIP also offers a new situation not yet encountered by the Court. This hybrid is at least in part an agency; it has and applies expertise; it has a multimember governing board; it does not wield substantial executive power. Thus, it largely fits into Seila Law‘s requirements for presidential removal only for cause. Because it is a nonprofit, however, it does not fit neatly into that box.

Although the Court in Seila Law rejected an agency-by-agency standard for removal as unacceptably “uncertain and elastic,” the example of governmental-charitable hybrids demonstrates to me that the Supreme Court needs to develop a standard that operates on a continuum. Similarly, Presidential administrations need to consider all the various factors that might lead to categorizing an entity as an independent agency. Moreover, the historical disputes regarding the Smithsonian and the current USIP dispute should serve as a warning to Congress to hesitate before establishing any more of these hybrids. If Congress does decide to do so, it should consider what previous experience has shown about what statutory provisions designed for government agencies should apply to such hybrids.

In short, the current dispute involving USIP has implications beyond the institution itself, with important lessons for all three branches of our government.

– Ellen P. Aprill

Ellen P. Aprill is the Senior Scholar in Residence at UCLA Law School’s Lowell Milken Center for Philanthropy and Nonprofits as well as the John E. Anderson Professor of Tax Law Emerita at LMU Loyola Law School.