The passage of the One Big Beautiful Bill Act (H.R. 1) by the 119th Congress is a landmark moment that nonprofit leaders across the country are watching closely. While this legislation is not considered a “nonprofit bill,” it will have a direct and profound impact on the nonprofit sector.
Tireless efforts by nonprofit executives, board members and community advocates who raised concerns with policymakers helped shape a final bill that is far better than earlier versions. You showed what’s possible when leaders come together in service of the communities we care about.
So what does this bill mean for nonprofit organizations, and where do we go from here?
Notable Changes in the One Big Beautiful Bill
Beginning in the 2026 tax year, the One Big Beautiful Bill Act has the following implications for charitable giving and nonprofits.
Caps and floors that disincentivize giving
- Individuals: While a new universal charitable deduction was included in the bill (up to $1,000 for individuals and $2,000 for couples), it places a cap on individual itemizers. Specifically, individuals can only claim a tax deduction on contributions that exceed 0.5% of their adjusted gross income. For example, if a person’s adjusted gross income was $100,000, they could only claim a tax deduction on gifts that are greater than $500.
- Corporations: Corporations will only be permitted to deduct charitable contributions to qualified charities that exceed 1% of their taxable income, further reducing incentives for philanthropy.
Historic cuts to safety nets
The bill includes the most significant reductions in Medicaid and SNAP in our nation’s history. With millions likely to lose access to essential health care and food resources, many will turn to nonprofits for support and solutions. This will inevitably result in increasing demands that will exceed many nonprofits’ capacity to meet them.
Positive advocacy wins
Thanks to the tireless efforts of nonprofits across the region and nation, the final legislation removed several damaging provisions:
- No new tax on foundations
- No penalty on nonprofit employers offering transportation benefits
- No administrative fee on the Combined Federal Campaign
- No authority for the executive branch to revoke nonprofit status without due process
What the One Big Beautiful Bill Means for Nonprofits
As federal support retracts and nonprofits face potential cuts in state funding, the sector is being asked to do more with less — again. But nonprofits are not a backup plan. Nonprofits are the essential infrastructure that communities rely on every day.
At the Nonprofit Leadership Center, we are preparing for the ripple effects this bill will unleash: increased demands for services, greater financial pressure, and a reshaping of how donors and corporations engage with charitable giving.
Make no mistake: the work ahead will not be easy. But rest assured that the Nonprofit Leadership Center is committed to supporting local nonprofits through continued change.
How the Nonprofit Leadership Center is Responding to Support Local Nonprofits
- We will continue to equip nonprofit leaders with the tools, training and convening needed to lead through uncertainty.
- We will provide spaces for peer learning and strategy sessions as organizations adapt to shifting funding dynamics.
- We will work alongside our sector partners and funders to advocate for policies that strengthen, not strain, our communities.
Together, we must stay informed, stay connected and stay courageous.
We’re in this together, and the Nonprofit Leadership Center is here to support you every step of the way.
