Director of Marketing
When the House passed the “One, Big, Beautiful Bill” this spring, by a single vote, it set off alarm bells across the nonprofit sector.
And for good reason: tucked into the sweeping budget package were several provisions that would reshape how nonprofits raise funds, steward resources, and deliver on their missions. We covered those original House provisions in our first blog on the One, Big, Beautiful Bill.
Now, the Senate Finance Committee has weighed in with its own draft of the bill. Some of the sector’s biggest concerns were addressed. Others remain unresolved. And while certain provisions offer real hope—like an expanded universal charitable deduction—most come with caveats.
At this stage, the bill is still subject to revision, and reconciliation negotiations are far from over. Congressional leadership has indicated they want finalized legislation before July 4. Whether that’s feasible remains to be seen.
Here’s what we know so far.
What’s The Same
Corporate Giving Floor Stays: Will It Change Anything?
The Senate retained the proposal to require corporations to give at least 1 percent of taxable income to qualify for charitable tax deductions. Corporations would also be allowed to carry over any giving above the current 10% cap for up to five years.
Some nonprofit advocates remain skeptical, arguing the change could discourage smaller businesses from giving if they fall below the threshold. But at Winkler Group, we’re not convinced this provision will significantly shift corporate giving behavior.
Here’s why: Giving by corporations—including direct giving and grants from corporate foundations—has hovered around 1.1 percent of pre-tax profits for the past 40 years. That’s the average.
So, the real question becomes: Is that 1.1 percent an even distribution—or is it skewed by a few mega-givers, while small businesses give far less? If it’s the latter, this floor may not have much bite.
The upside? This provision could help normalize corporate philanthropy as a baseline expectation, especially among larger corporations. But whether it meaningfully moves the needle for your organization likely depends on who your corporate partners are and how proactive you are in helping them see the ROI of giving.
Good News: Nonprofit Status Protections Remain Intact
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In the last four decades, corporate giving as a percentage of corporate pre-tax profits has averaged 1.1 percent.
Source: Giving USA Foundation, Giving USA 2024: The Annual Report on Philanthropy for the Year 2023
A controversial proposal to allow the Treasury Department to revoke tax-exempt status—without due process—for organizations suspected of supporting terrorism was removed from the House bill and remains absent in the Senate version.
While the provision was framed as a national security safeguard, its implications for civil society were troubling. Its exclusion is a welcome relief and a reminder that vigilance and advocacy still matter.
What the Senate Changed in the Latest Draft
Universal Charitable Deduction Gets an Upgrade
The Senate version includes a significant expansion of the universal charitable deduction. Taxpayers who do not itemize would be allowed to deduct up to $1,000 individually or $2,000 jointly in charitable gifts.
This is a marked increase from the House version and could reinvigorate individual giving—especially among working families, retirees, and first-time donors who haven’t had a tax incentive to give in years. If this provision holds, it could be a game-changer for annual fund programs and donor participation at the grassroots level.
Still, we urge nonprofits to proceed with cautious optimism. Tax policy can open the door, but it’s stewardship, relevance, and storytelling that bring donors back through it
Senate Pulls Back on Foundation Tax Hike
The House version had proposed a tiered excise tax system on private foundation investment income, with some organizations facing rates as high as 10 percent. That’s now off the table.
The Senate kept the current flat 1.39 percent excise tax. This is a clear win. A more punitive structure could have seriously impacted how much foundations were able to grant each year—a figure that topped $100 billion in recent years.
University Endowment Tax Softened but Still a Factor
The Senate preserved the proposal to increase taxes on investment income for wealthy colleges and universities but significantly reduced the rates.
What's An Excise Tax?
An excise tax is a special tax on certain types of income or spending. In this case, it’s a tax on the money that foundations and universities earn from their investments—things like stocks or property. The idea is to push wealthy institutions to spend more of their resources to support the public, instead of growing large endowments without giving back.
The House bill would have taxed the largest institutions at up to 21 percent. The Senate version tops out at 8 percent.
The justification? That universities with multi-billion-dollar endowments should be spending more on students and communities. Whether that leads to more equitable funding or just institutional belt-tightening remains to be seen.
SNAP and Medicaid Cuts Go Even Deeper
The Senate version of the bill doesn’t just mirror the House’s proposed cuts to public assistance programs: it expands them.
The Senate proposal would cut even more Medicaid funding than the House bill, which had already called for $1 trillion in health care reductions and would terminate coverage for over 16 million Americans. Senate Republicans have broadened eligibility restrictions by expanding Medicaid work requirements to include parents of children over 14. Previously, the House version exempted all parents with dependents.
Similarly, the SNAP work requirements are also expanded. The House required parents of children over seven to work 80 hours a month or enroll in a community service program to maintain benefits. The Senate raises that threshold to parents of children over 10 and includes older adults up to age 64.
For nonprofits, these changes are more than policy shifts—they’re direct pressure points. Organizations serving families, low-income workers, and the elderly will likely see increased demand for services with less federal support. Organizations that already operate with lean budgets may now be expected to fill even wider gaps in the social safety net.
Closing Thoughts: Stay Informed
Policy is moving fast—and not always in the direction nonprofit leaders would choose. While there are some real gains in the Senate’s version of the “One, Big, Beautiful Bill,” there are also plenty of unresolved questions and potential complications.
What we do know: The final tax legislation is far from settled. What’s in today could be out tomorrow. And even the provisions that stay will require real adaptation from nonprofit leaders.
Want to understand how these policy changes intersect with 2024 giving trends?
Join us next week for a candid, data-informed conversation during our Giving USA 2025 webinar, co-hosted with AFP Miami. In just one hour, we’ll unpack:
- The most important takeaways from this year’s Giving USA report
- A clearer picture of where charitable dollars are moving—and why
- Policy developments reshaping donor behavior in real time
- Practical strategies to stay focused, resilient, and ready for change
Further Reading
- H.R.1 – One Big Beautiful Bill Act (congress.gov)
- Finance Committee Legislative Text Title VI (finance.senate.gov)
- One, Big, Beautiful Bill: Impact on Philanthropy (cof.org)
- Senate Pushes to Make Universal Charitable Deduction Permanent (nonprofitpro.com)
- Draft Tax Legislation Released by Senate Finance Committee Brings Some Good News for Tax-Exempt Organizations (ropesgray.com)
- Senate Republicans Seek Tougher Medicaid Cuts and Lower SALT Deduction in Trump’s Big, Beautiful Bill (pbs.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.
