Tax Cuts & Jobs Act Bill

Implications for the Nonprofit Sector

Philanthropy and charitable giving are dealt a blow with the new Tax Cuts and Jobs Act Bill, currently on its way to President Trump’s desk.

Here’s what you and your nonprofit need to know about this major overhaul of U.S. Tax Code.

Tim Delaney, President & CEO of the National Council of Nonprofits, released the following statement in response to the House and Senate passing the Tax Cuts and Jobs Act Bill:

“The tax bill that Congress just passed on a party-line vote is a brazen insult to charitable nonprofits and the people we serve in communities every day. The bill will increase demands for nonprofit services by blowing a deeper hole in the federal deficit, which then will be used to ‘justify’ spending cuts to programs on which the public depends. Simultaneously, it will block resources nonprofits need to address existing and growing demands for services by reducing charitable giving by billions of dollars and taxing tax-exempt organizations to pay for huge tax cuts for wealthy corporations and individuals.” Read Tim Delaney’s full statement here.

The changes included in this bill will have a serious adverse effect on the nonprofit sector. Below we’ve outlined just a few of the key changes coming your way in the new year.

Implications for the Nonprofit Sector:

  • By doubling the standard deduction (up to $24,000 for couples and $12,000 for individuals) without any other adjustment to the charitable deduction, the tax bill will take giving incentives away from 90% of Americans.
  • They’re estimating the removal of this giving incentive will rob communities of between $13 and $20 billion dollars every year. Dollars that otherwise would have been dedicated to public good.
  • These changes could lead to massive job loss in the nonprofit sector. Estimates range from 220,000 to 264,000 jobs lost.
  • “Good news,” this bill did strip out the attempt to politicize charitable nonprofits, houses of worship, and foundation (aka The Johnson Amendment).
  • The Affordable Care Act, which if repealed, is predicted to cause 13 million people to lose health insurance while raising premium costs.
  • The change to unrelated business income (UBIT) could result in increased taxes on nonprofits.

For a full Nonprofit Analysis of the Tax Cut and Jobs Act, click here.

Dan Cardinali, President & CEO of the Independent Sector, provides a glimmer of hope, stating…

“Make no mistake, we believe this legislation undermines civil society and exacerbates inequality, placing our country on the wrong path – but the passage of a single bill does not signal the end of our fight or resolveCharitable organizations across the country successfully advocated to keep several damaging provisions out of the final bill, including a repeal of the Johnson Amendment, and our work is just beginning.” Read Dan Cardinali’s full statement here.

We’ll continue to provide updates on social media as this tax bill unfolds in the new year. You can find us on Facebook, Twitter, LinkedIn, and Instagram.


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