Public policy news and updates for the philanthropic sector

May 16, 2025

What's Happening This Week...

• What We're Tracking
• Happening in the States
• News, Resources, and Events

What We're Tracking in DC

Budget Reconciliation Update

House Republicans’ tax package, which was released Monday, includes several provisions that directly impact the philanthropic sector, such as:

• Tiered increase of the private foundation excise tax
• 1% floor on charitable contributions from corporations
• $150 charitable deduction for nonitemizers
• Revocation of tax-exempt status for terrorist-supporting organizations
• Changes to Unrelated Business Income Tax

CORRECTED FROM PREVIOUS VERSION: The Ways and Means Committee approved the tax bill component of the broader reconciliation bill along party lines early Wednesday morning. The House Budget Committee met this morning to combine the bills reported out of various committees into one large reconciliation package but failed to advance the package. Negotiations continue, with Republicans still expected to hold a floor vote ahead of Memorial Day. The Senate has begun having conversations about what they will do when the bill comes over to them. Follow along in our tax bill hub.

Read our detailed summary and analysis of what’s in the bill; our letter with infrastructure partners on the harmful impact of increasing the private foundation excise tax; and our statement with Independent Sector on our continued opposition to giving the Treasury Secretary the ability to unilaterally revoke tax-exempt status of organizations suspected of supporting terrorism.

We need your voice. It is critically important that members of Congress hear from you now. We’ve put together a set of resources to help you do that:

• Phone script on private foundation excise tax
• Action alert
• Talking points to use in conversations with your member of Congress
• Rules on private foundation self-defense communications
• Share the impact to your grantmaking with us

Reach out to govt@cof.org with further questions.

Happening in the States

Regulations Affecting Charitable Nonprofits

Several bills seek to change nonprofit regulations and oversight by state law enforcement.

• Montana: A bill sent to the Governor’s desk would exempt nonprofit officers at small nonprofits with 10 or fewer employees from personal liability for unpaid tax withholding. It would provide exclusions if the officer or director receives compensation beyond reasonable reimbursement of expenses, the nonprofit is out of compliance for more than 12 months, or the officer or director is involved in fraud, embezzlement, or intentional misconduct.
• Rhode Island: A troublesome bill has resurfaced with a new bill number (H.B.6235, previously H.B.5454) to require nonprofits, as a condition for requesting state funds from the General Assembly, to post on their website the salaries, costs, and benefits provided to their ten highest-paid directors, officers, and employees. It would also require disclosure of any other sources of funding, including fundraising, endowments, trusts, memorial giving, and any and all activities that fund the nonprofit.
• Tennessee: S.B.0453 was signed into law, allowing more time to submit filings required for charitable solicitation campaigns. The filings will now be due within 90 days after completion instead of prior to commencement. It also removes a provision that required notification within 7 days of any changes in campaign solicitation literature or promotion materials by a professional solicitor.

News & Resources

• Don’t tax foundations to fund bureaucracy, Washington Examiner
• 2025 Tax Cuts Tracker, Tax Policy Center
• Why a $10,000 Deduction Is Blocking the G.O.P.’s $3.8 Trillion Tax Bill, New York Times
• Government should help foundations do good work — not hinder them, Charles Stewart Mott Foundation
• Statement on Foundation Excise Taxes, Community Foundation Awareness Initiative

Keep in Touch!

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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