Council Connection: Updates for Council Members

Public policy news and updates for the philanthropic sector

Happening at the Council

Philanthropy's Response to Texas Floods

Extreme rainfall in central Texas led to unprecedented, catastrophic flooding. At least 120 people have died and rescuers are still working to find dozens of missing people. Flash flood warnings are still in effect for parts of central Texas and a Major Disaster Declaration has been announced. Review our guide to see resources on our sector's response.

What We're Tracking in DC

H.R.1 Signed Into Law

Last week, both the House and Senate passed the budget reconciliation package. President Trump signed it into law on July 4. Key provisions that impact philanthropy include:

  • Establishing a permanent charitable deduction for nonitemizers capped at $1,000 ($2,000 for joint filers), not including contributions to donor-advised funds;
  • Making permanent the 60% of AGI limit for charitable contributions of cash for itemizers;
  • Creating a 0.5% floor for the charitable deduction for itemizers (i.e., itemizers must donate 0.5% of their AGI before the charitable deduction kicks in);
  • Limiting the tax benefit of all itemized deductions to 35%;
  • Creating a 1% floor on charitable giving from corporations (and maintains the existing 10% ceiling).

The final package does not include an increase to the private foundation excise tax or changes to nonprofit unrelated business income tax. Review our updated summary for more detail on these and other provisions that impact philanthropy.

IRS Offers to Settle With Texas Churches

Last year, the National Religious Broadcasters and two Texas churches sued the IRS challenging the Johnson Amendment, which prohibits 501(c)(3) organizations from engaging in electioneering, including endorsing candidates for political office.

Earlier this week, the IRS submitted a court filing stating that “communications from a house of worship to its congregation in connection with religious services through its usual channels of communication on matters of faith do not run afoul of the Johnson Amendment.” If the Court accepts the proposed settlement, it will apply only to the plaintiffs. The proposed settlement is concerning because even though it wouldn't establish binding precedent, it has the potential to encourage additional efforts to weaken the Johnson Amendment.

The Council strongly supports the Johnson Amendment as a protection for tax-exempt organizations, and we remain concerned about any potential weakening of it. See the Council’s statement in response to the IRS motion.

Additional Updates

  • Last Wednesday, the President’s FEMA Review Council hosted its second public meeting, where they established a Federal-State Coordination Subcommittee, Disaster Response and Recovery Assessment Subcommittee, and the Final Report Subcommittee. Review a recording of the meeting.
  • Last month, U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner announced the relocation of HUD’s headquarters from Washington, D.C. to Alexandria, Virginia.
  • At the U.S. Department of Health and Human Services, the Federal Office of Rural Health Policy, Health Resources and Services Administration recently opened the application for the Targeted Technical Assistance for Rural Hospitals Program, which offers technical assistance to rural hospitals to address financial and operational challenges. The application deadline is September 30, 2025.
  • The U.S. Department of Energy’s Loan Programs Office is offering direct loans or partial loan guarantees for investments in Tribal communities that focus on developing, constructing, or acquiring eligible energy development projects. The application deadline is August 31, 2028.
  • At the U.S. Department of Agriculture, USDA Rural Development is offering loans and grants to alleviate health risks on tribal lands, with a focus on access to reliable drinking water and waste-disposal services to low-income communities that face significant health risks. The application is open without a specified deadline.

Happening in the States

New State Employment Laws Going into Effect

Several laws affecting foundations and charitable nonprofits as employers are taking effect in July. The Alaska state minimum will increase to $13 per hour due to a ballot measure passed in 2024. Under the same ballot measure, paid sick leave is established and employers cannot hold “mandatory meetings about religious or political issues.” Indiana employers are now prohibited from retaliating against workers that take time off from work to attend school conferences, but that time is not required to be paid. Employers in Vermont with five or more employees must include wage ranges in job postings. Finally, as of July 27, Washington State’s paid sick leave will include time off for employees to “prepare for, or participate in certain, any judicial or administrative immigration proceeding involving the employee or employee’s family member.”

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Please feel free to reach out to any of us on the Government Relations Team with comments or concerns, or to share an issue, article, event, or op-ed you would like to see covered in a future Washington Snapshot.

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