Washington, DC – Today, President Trump signed into law H.R. 1, previously known as the “One Big Beautiful Bill Act.” The sweeping tax legislation makes significant changes to the U.S. tax code, including the creation of a universal charitable deduction. However, nonprofit leaders warn that the law will ultimately harm millions of Americans by weakening the nonprofit sector’s ability to meet rising needs—needs that are increasingly going unmet by both government and the private market.
“H.R. 1 will ultimately harm the millions of people in America who rely on their local nonprofit organizations for essential services,” stated Diane Yentel, President and CEO of the National Council of Nonprofits. “While there are some bright spots, including a universal tax deduction for charitable giving, the tax bill falls far short of meeting the growing needs of the nonprofit sector to fill gaps unmet by government and the private sector.”
Despite some helpful provisions, the tax bill overall reduces resources available to nonprofit organizations, negatively impacting their ability to provide essential services to their local communities. The final bill creates a new universal charitable deduction that is estimated to generate $74 billion over 10 years for nonprofit organizations. However, the bill includes several provisions that disincentivize charitable giving by individuals and corporations, which are estimated to reduce resources for nonprofit organizations and their communities by at least $81 billion over 10 years. The bill also harms millions of people by taking away their access to healthcare and food assistance, putting greater pressure on nonprofit organizations to help meet these needs.
“This tax bill will make it harder for nonprofits to meet the critical needs of their communities, whether in small towns or big cities, in every congressional district and state,” stated Yentel. “Nonprofits show up in times of crisis, providing disaster relief, crisis support, and safety from danger, and they meet everyday needs from providing childcare and eldercare, job training, or essential food and shelter.”
The tax bill will likely result in fewer resources for nonprofit organizations. As a result, these vital institutions may be forced to cut back on services or serve fewer people. This harm is compounded by other attempts to reduce or eliminate funding to nonprofit organizations through arbitrary and unlawful cuts to congressionally-approved spending and reckless federal funding freezes by the Trump administration.
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