Director of Marketing
Proponents call it the “One, Big, Beautiful Bill.” For nonprofits, the picture is more complicated.
This federal budget reconciliation package—recently passed in the House by a single vote (215–214)—now moves to the Senate. On the surface, it’s a tax bill. But underneath, it’s a sweeping piece of legislation that could shift how, and how much, nonprofits operate, fundraise, and serve their communities.
From our perspective at Winkler Group, the “One, Big, Beautiful Bill” is a mixed bag. The inclusion of the Charitable Act is a big win and could spark up to $20 billion in new giving annually.
But the bill also introduces new hurdles: higher taxes on investment income, stricter limits on endowments, changes to safety-net programs, and new rules for corporate giving. These shifts may start with big institutions, but they’ll impact nonprofits of every size, especially those already managing tight budgets and rising demand.
What follows is a breakdown of five key takeaways—each with a plain-language summary of what’s changing, the risks and possible benefits, and what you can do to prepare.
1. The Charitable Act is Back, With Strings Attached
The Charitable Act, long championed by nonprofits, made it through the House. It reinstates a tax deduction for charitable gifts made by donors who don’t itemize. When the 2017 Tax Cuts and Jobs Act nearly doubled the standard deduction, the number of itemizers fell sharply, leading to an estimated $20 billion drop in giving per year. The Charitable Act aims to reverse that trend.
Why Nonprofits Are Worried
While the Charitable Act is a huge step forward, it’s buried in a bill that shifts nearly $50 billion in new tax burdens onto nonprofits to fund unrelated tax cuts. That means potential gains in individual giving could be offset by higher operating costs or compliance burdens for larger institutions.
If It’s Leveraged Well...
This could re-engage everyday donors, especially those who stopped giving when the tax benefit disappeared. Bringing back this deduction invites broader participation in philanthropy—not just from major donors, but from individuals who want to make a meaningful impact with smaller gifts.
Preparing Your Organization
If your organization relies on annual fund donors—especially retirees, working families, or first-time supporters—this could make giving more appealing again. It’s time to sharpen your case for support, revisit stewardship strategies, and be ready to talk about the value of every gift, no matter the size.
2. Pressure to Spend, Not Save: Excise Taxes on Endowments
The bill introduces a tiered excise tax on investment income for large private colleges and universities, replacing the current flat 1.4% rate. Lawmakers argue that institutions with hedge fund–sized endowments should use their resources, not hoard them.
Why Nonprofits Are Worried
Critics argue that taxing endowments will discourage long-term investments and may push institutions to game the system, like reducing enrollment to fall below the threshold rather than using endowment earnings to reduce tuition.
If It’s Leveraged Well...
Supporters argue that elite schools should do more with their wealth—especially when tuition costs and student debt remain high. Increased scrutiny may push universities to invest more in scholarships, community programs, or nonprofit partnerships.
Preparing Your Organization
If you’re at a nonprofit that receives funding from a university partner or competes for grants from large institutional foundations, keep an eye on how these changes may influence their giving.
Expect more scrutiny over how endowments are spent—and possibly more pressure on smaller organizations to show impact in exchange for fewer available dollars. It may also open doors: elite institutions might be more motivated to collaborate or fund community-based work that shows measurable return.
3. Cuts to Social Programs Will Strain the Sector
The “One, Big, Beautiful Bill” proposes major cuts to SNAP and Medicaid, with estimates that up to 15 million Americans could lose coverage.
These changes come on the heels of a separate, devastating blow: the dismantling of AmeriCorps earlier this spring. In April, the Department of Government Efficiency (DOGE) forced AmeriCorps leadership to terminate more than 32,000 service positions and halt grants to over 1,000 community organizations.
Why Nonprofits Are Worried
SNAP and Medicaid cuts will increase community need. The loss of AmeriCorps removes a key pipeline of service-oriented staff just when demand for services is likely to spike. Many nonprofits—especially those in education, housing, and disaster response—relied on AmeriCorps members to fill essential roles.
If It’s Leveraged Well...
There’s no true replacement for AmeriCorps, but volunteers may take on a more central role. With the value of a volunteer hour estimated at $34.79 in 2025, rethinking how volunteers are trained and integrated could help close the gap left behind.
Preparing Your Organization
Expect increased demand for services, especially if you work in healthcare, housing, or food security. If you lost AmeriCorps support, assess how you can expand volunteer roles, cross-train staff, or partner with peer organizations. Think creatively about how to backfill service gaps—whether that’s through your board, alumni networks, or retired professionals with time and expertise to give.
4. Corporate Giving Reform: A Floor, Not Just a Ceiling
Currently, corporations can deduct charitable gifts up to 10% of their taxable income—but there’s no minimum requirement. This bill introduces a 1% floor: companies must give at least 1% to qualify for deductions.
Why Nonprofits Are Worried
For small nonprofits, this may feel like yet another pressure point. Many rely on in-kind or sponsorship support from small and mid-sized businesses that may not meet the new threshold and thus opt out of giving altogether.
If It’s Leveraged Well...
This provision sends a message that philanthropy is a civic responsibility, not just a PR tool or tax strategy. Over time, it could normalize giving as part of standard business practice, encouraging a broader culture of corporate generosity.
If enforced equitably, this provision could drive up total corporate giving, especially among large, profitable firms that haven’t historically given at scale.
Preparing Your Organization
If your nonprofit has long depended on local businesses for sponsorships or in-kind donations, this is a good time to revisit your pitch. Focus on shared impact, not just sponsorship perks.
For larger companies with room to grow their philanthropy, this could be an opening to forge new partnerships with national or high-revenue companies that now have a tax incentive to give. Be proactive: corporate giving officers will be looking for easy, aligned opportunities to meet the new minimum.
5. Threat to Tax-Exempt Status Removed (For Now)
A provision would have allowed the Treasury Secretary to revoke a nonprofit’s tax-exempt status based on suspected ties to terrorism—without due process or judicial review.
Why Nonprofits Are Worried
The idea of politically motivated enforcement raised alarms, especially for nonprofits engaged in international aid or advocacy. Even though it didn’t make it into the final version, its appearance signals what’s at stake in future legislation.
If It’s Leveraged Well...
Its removal represents a rare bipartisan win for nonprofit advocates. It also shows how fast, coordinated action can influence outcomes and protect sector integrity.
Preparing Your Organization
Use this as a cue to tighten compliance practices and revisit governance policies. If your work touches advocacy, global partnerships, or sensitive populations, stay vigilant. Join sector coalitions. Speak up early and often when similar provisions appear in future bills.
As the Senate Takes It Up: What You Should Watch
The Senate may still alter the bill, though most discussion has centered on deficit reduction and shifting SNAP costs to the states—not on reversing provisions that affect nonprofits. That means the nonprofit sector must continue to watch closely, speak up, and adapt.
Two final potential upsides to watch:
- Rebalancing Attention Toward Local Nonprofits: As mega-endowments come under scrutiny, mid-sized and community-based nonprofits may attract new support from donors looking for direct, local impact.
- New Energy for Advocacy and Collaboration: This bill has galvanized nonprofit leaders across subsectors to speak with one voice. That kind of unity could drive meaningful advocacy long after this bill is signed—or stalled.
Final Thoughts
The “One Big Beautiful Bill” may not target nonprofits outright—but we’re clearly in the crosshairs. Higher costs, fewer supports, and uncertain donor behavior mean this is a moment for clear thinking and proactive leadership.
Whether your organization supports the “One, Big, Beautiful Bill,” opposes it, or is still weighing the implications, here are a few ways to stay engaged:
- Raise your voice. Use the National Council of Nonprofits’ templated form to contact your lawmakers. It takes just a minute to urge them to protect the nonprofit sector in any final version of the tax package.
- Add your name. Sign this national letter by June 2 calling on Congress to remove harmful provisions that target nonprofits. The letter is led by a coalition of trusted peer institutions: the National Council of Nonprofits, Council on Foundations, Independent Sector, and United Philanthropy Forum.
- Stay informed. The Council on Foundations has published a helpful summary, One, Big, Beautiful Bill: Impact on Philanthropy, that breaks down what’s at stake for funders and grantees alike.
- Talk to us. Not sure how this affects your fundraising or planning? We’re here to help you think it through.
No matter your stance on the bill, the decisions made over the next few weeks will shape the nonprofit landscape for years to come. Now is the time to ask questions, seek clarity, and use your voice—not just for your organization, but for the communities you serve.
Further Reading
- H.R.1 – One Big Beautiful Bill Act (congress.gov)
- 2025: Trends and Predictions That Will Shape Philanthropy (winklergroup.com)
- The Real Cost of the “One, Big, Beautiful Bill” (charitylaywerblog.com)
- One, Big, Beautiful Bill: Impact on Philanthropy (cof.org)
- House Passes Budget Reconciliation Bill That Would Tax Nonprofits Nearly $50B (nonprofitpro.com)
- How the Tax Bill Could Change the Way Colleges Operate (axios.com)
- The Value of Volunteer Time (independentsector.org)
- AmeriCorps Dismisses Corps, Staff, Cancels $400 Million in Grants (philanthropynewsdigest.org)
Rachel Canady is director of marketing for the Winkler Group. She connects nonprofit partners with resources they can use to impact their communities—providing industry insights, research, and strategy to help them expand their reach and deepen their mission. Rachel has a special interest in U.S. policy and its impact on the nonprofit sector, sector reports, and the history of philanthropy. Connect with Rachel on LinkedIn.
