The U.S. House of Representatives has recently advanced a significant legislative package called the “big, beautiful bill.” This comprehensive proposal includes substantial tax reforms and spending cuts that could have far-reaching effects on various sectors, including nonprofits.

Key Provisions Affecting Nonprofits

As the House fast-tracks this sweeping tax legislation, nonprofit leaders need to understand the real-world implications hidden in its fine print. While the bill’s broader economic goals dominate headlines, several lesser-known provisions could directly affect how nonprofits operate, fundraise, and serve their communities. These changes aren’t just bureaucratic—they impact everything from donor behavior to staffing and long-term financial sustainability. Here’s what you need to know.

• Expanded Authority to Revoke Tax-Exempt Status: The bill grants the Treasury Secretary the power to revoke a nonprofit’s tax-exempt status under certain conditions, raising concerns about potential impacts on nonprofit operations.

• Increased Taxes on Foundation Investments: Private foundations may face higher taxes on their net investment income, potentially reducing funds available for charitable activities.

• New Taxes on Employee Benefits: The proposal includes taxing certain employee benefits provided by nonprofits, such as transit and parking, which could strain budgets and affect employee retention.

• Limitations on Charitable Deductions: High-income taxpayers would see a reduction in the value of their itemized deductions, including charitable contributions, possibly discouraging large donations.

• Corporate Giving Requirements: Corporations must donate at least 1% of their taxable income to qualify for charitable deductions, a threshold many currently do not meet.

What’s Next

On May 14, 2025, the House Ways and Means Committee approved the proposed tax bill following a 17-hour session. The bill passed along party lines with a 26-19 vote and now advances to the House Budget Committee for further consideration.

Next, it will be bundled with other legislation from different committees and could be up for a full House vote as early as the week of May 19.

Here’s what makes this process move faster than usual: lawmakers are using budget reconciliation. That means they only need a simple majority (just over half the votes) in the House and Senate to pass it. Usually, passing major legislation take a lot more votes and faces more hurdles.

 Republicans have a slim majority in the House. If more than three of their own members vote against it, the bill could fail unless they get support from Democrats. If it does pass the House, it moves to the Senate for another vote. If it passes there, too, it goes to the President for final approval.

Leaders have said they want the bill signed into law by July 4. That gives nonprofits a very short window to raise awareness, ask questions, and push for changes before it’s too late.

How You Can Help: Contact Your House Representative

Here’s how to find your representative and make your voice heard:

Look up your representative

Visit house.gov/representatives/find-your-representative

Call their office

Enter your ZIP code to get your rep’s name and phone number. Then call their Washington, D.C. office or local district office.

What to say (script example)

“Hi, my name is [Your Name], and I’m a constituent. I’m asking Representative [Last Name] to oppose provisions in the recent House tax bill that threaten the nonprofit sector. This bill could increase costs, reduce donations, and limit the ability of nonprofits to serve our community. Please protect the critical work that nonprofits do by voting against these provisions. Thank you.”

Nonprofits Are Essential And Worth Protecting

Nonprofits are the backbone of community care, advocacy, and innovation. This proposed legislation risks limiting their ability to serve, grow, and respond to urgent needs. Now is the time to speak up. You’re not just defending your organization, you’re protecting the vital work nonprofits do every day. Stay informed, stay engaged, and let Congress know that the nonprofit sector deserves support, not setbacks.