Policy Alert – House Passes Tax Bill – Key Wins & Remaining Concerns as Bill Heads to Senate

The “One Big Beautiful Bill Act” was passed by the U.S. House Budget Committee over the weekend and then by the Rules Committee earlier this week. Early yesterday morning, the U.S. House of Representatives passed the budget reconciliation bill by a narrow vote. The bill is now in the Senate for consideration and continues to include significant changes impacting the philanthropic sector. We encourage you to contact your U.S. Senator to share your concerns and how these provisions would impact your communities.  

Key Changes to the Bill:  

• The House Rules Committee removed provisions that would have granted unprecedented authority to the Executive Branch to revoke nonprofit status from organizations without due process through language similar to HR 9495 as well as Unrelated Business Income Tax (UBIT) language related to name and logo royalties.

Critical Issues for Advocacy:  

• Tiered Tax Increase on Private Foundation Investment Income: The proposal to impose substantially higher excise tax rates on the net investment income of private foundations based on their asset size remains in the bill. This could still significantly reduce funds available for grantmaking and charitable programs.
  • Research shows that the proposed increases would cost Ohio foundations $17.3 million.  
• 1% Floor for Corporate Charitable Contributions: The bill retains the 1% floor, meaning corporations could only deduct charitable contributions exceeding 1% of their taxable income. This provision could lead to a decrease in corporate philanthropy.
   
• Universal Charitable Deduction: On a continued positive note, the provision to temporarily reinstate a universal charitable deduction for non-itemizers ($150 for individuals, $300 for joint filers for tax years 2025-2028) remains in the House-passed bill.  

Take Action Now:

✓ Your voice is essential as this bill continues to move quickly through Congress over the next few weeks.

✓ Send messages to Senators Jon Husted and Bernie Moreno.

✓ Consider joining the National Council of Nonprofits, United Philanthropy Forum, Council on Foundations and Independent Sector’s sign-on letter calling for the Senate to remove several provisions that would be harmful to nonprofits and philanthropy.

Related Resources:

• Philanthropy Ohio Federal Policy Update May 20 Program recording.
   
• View the National Council of Nonprofits' updated resource.
   
• Center on Budget Policies and Priorities research finds that the House bill includes over $700 billion in cuts to Medicaid, other changes related to marketplace coverage where 15 million people could lose health care; and $300 billion in SNAP cuts, where 43 million people could lose or have food assistance reduced, including 2 million children.
   
• View the Ohio Medicaid Matters Coalition letter to the Ohio Congressional Delegation.
   
• The Center for Community Solutions’ preliminary estimates: Proposed federal cuts would require at least $645 million per year in new state spending to maintain current SNAP benefit levels.

Upcoming Policy Programs 

Philanthropy Ohio Policy Summit
Thursday, June 12 | 10 a.m. – 3 p.m. | Dayton, Ohio

Foundational Advocacy Workshop with Bolder Advocacy
Tuesday, May 28 | 12:30 – 2 p.m | via Zoom
Philanthropy Ohio collaborates on a national level as a member of the United Philanthropy Forum, which links our organization to the largest national network of grantmakers addressing common issues. As a member of Philanthropy Ohio, you can register for the United Philanthropy Forum’s Foundational Advocacy Workshop with Bolder Advocacy, which is open to Forum members and their foundation networks.

For more information or questions, please contact Adrienne Wells.