What the Big Beautiful Bill Means for Nonprofits

On July 4, 2025, the “Big Beautiful Bill” (H.R. 1) was signed into law, bringing a wide range of tax changes for individuals, corporations, and nonprofit organizations. While many provisions from the original proposal were revised, the final legislation still includes several updates that nonprofits—and their donors—should be aware of as they plan ahead.

Here’s a breakdown of what’s changing and how your organization can prepare.

Expanded Deduction for Non-Itemizers

Starting in 2026, individuals can deduct up to $1,000, and married couples up to $2,000, even if they don’t itemize their taxes. This universal charitable deduction may encourage broader participation in giving, particularly from small and mid-level donors.

New Charitable Floor for Itemizers

Itemizers will now be able to deduct charitable contributions only above 0.5% of their income, beginning in 2026. While this threshold is modest, it’s a good time to review your donor communications to ensure regular supporters understand how this change might affect them.

SALT Deduction Cap Increases (Temporarily)

The State and Local Tax (SALT) deduction cap rises to $40,000 in 2025, with scheduled increases through 2029. After that, it reverts to the current $10,000 cap. Donors in high-tax states like New Jersey may want to consider how these changes impact their broader financial and charitable planning.

Standard Deduction Adjustments

The standard deduction increases permanently by $750 for individuals and $1,500 for joint filers, with future inflation adjustments. Seniors also receive an additional deduction through 2028. These changes may reduce the number of itemizers, making the nonitemizer deduction even more relevant for many donors.

Other Updates of Interest

• A new 1% floor for corporate charitable deductions takes effect in 2026, which may be relevant for your corporate partners or sponsors.
• The excise tax on foundation net investment income remains unchanged at 1.39%.
• A sliding-scale excise tax on university endowments, ranging from 1.4% to 8%, has been enacted for large institutions.

What Your Organization Can Do Now

• Educate donors about the upcoming universal charitable deduction and any potential impact on their giving strategies.
• Review your fundraising approach to align with changes affecting both individuals and corporate contributors.
• Stay informed as implementation guidance is released, particularly around SALT caps and deduction thresholds.

As always, we’re here to help you make sense of these updates and how they may affect your organization’s financial planning, development strategy, and compliance efforts.

For a side-by-side comparison of the original House bill and the final legislation, see the helpful summary chart prepared by the Center for Non-Profits in New Jersey.

Have questions? Our nonprofit team is ready to assist.

Visit the National Council of Nonprofits’ update on H.R. 1.