Nonprofits Under Threat: Take Action Now!
The House Ways and Means Committee released its draft tax legislation, which is the core of a major tax reconciliation package that Congress hopes to enact by summer. The draft tax bill includes many provisions which, if enacted, could have a significant impact on nonprofit organizations nationwide and the people they serve.
Impacts on Nonprofits
The tax bill includes several harmful provisions that would, if enacted, threaten the entire nonprofit sector:
- Giving unprecedented authority to the Administration to revoke nonprofit status from certain organizations without due process. If enacted, Section 112209 would allow the Secretary of the U.S. Department of the Treasury to unilaterally revoke nonprofit status from “terrorist supporting organizations,” without requiring the Secretary to share full evidence or ensure due process. While nonprofit organizations unequivocally oppose terrorism in all forms, any such enforcement action must still be grounded in transparency, evidence, and the rule of law. This authority could enable any Administration of any political party to target charitable organizations based on ideological grounds. Nonprofit organizations wrongfully designated would be irreparably harmed, losing the trust of donors and the communities they serve.
- Increasing taxes on private foundations as a “pay for” for significant tax cuts to corporations and high-income individuals. Section 112022 would, if enacted, significantly reduce financial resources available to nonprofit organizations to advance their missions. Foundations with assets of more than $5 billion will see tax rates of 10%, those with assets between $250 million to $5 billion would see tax rates of 5%, those with assets between $50 million and $250 million would pay 2.8%, and those with assets under $50 million would pay the existing 1.4% tax. At a time when nonprofit organizations face enormous financial challenges, the tax bill would make it even harder for organizations to serve their communities and fill the gaps unmet by local, state, and federal governments.
Please urge your Representatives and Senators to:
- OPPOSE granting unprecedented authority to the Executive Branch to revoke nonprofit status from organizations without due process. This provision allows Administrations to target charitable nonprofits based on ideological grounds.
- OPPOSE new or expanded taxes on nonprofit organizations, including private foundations. These proposals divert scarce resources away from essential services, undermine the ability of charitable nonprofit organizations to meet needs in their communities, and put greater strain on government.
- SUPPORT and EXPAND tax incentives for charitable giving. Congress should include in the tax reconciliation bill the Charitable Act, introduced by Sen. Lankford (R-OK) and Rep. Moore (R-UT), to create a non-itemizer tax incentive for charitable donations to nonprofit organizations.
Next steps
The draft tax bill is slated for a vote in the Ways and Means Committee on Tuesday, May 13. If the bill passes, it will be quickly combined with legislation approved by other committees, before heading the House floor for a vote as soon as the week of May 19.
You can use the following script in order to contact your Representatives and Senators in Congress. Phone calls are more effective, but emails are a valid option as well:
"My name is (your full name) and I live at (full address). I’m calling to urge (Representative/Senator's name) to OPPOSE granting unprecedented authority to the Executive Branch to revoke nonprofit status from organizations without due process. This provision allows Administrations to target charitable nonprofits based on ideological grounds. OPPOSE new or expanded taxes on nonprofit organizations, including private foundations. These proposals divert scarce resources away from essential services, undermine the ability of charitable nonprofit organizations to meet needs in their communities, and put greater strain on government. SUPPORT and EXPAND tax incentives for charitable giving. Congress should include in the tax reconciliation bill the Charitable Act, introduced by Sen. Lankford (R-OK) and Rep. Moore (R-UT), to create a non-itemizer tax incentive for charitable donations to nonprofit organizations."
