As Congress moves beyond the “One Big Beautiful Bill Act” (OBBBA), a new wave of legislative priorities is beginning to take shape. These shifting dynamics present both opportunities and challenges for not-for-profit organizations, especially as the federal government revisits tax policy, funding decisions, and regulatory reform.
For not-for-profits that engaged in advocacy during OBBBA’s development, there are valuable lessons to carry forward. Strategic communication and proactive engagement helped the sector secure meaningful wins, including the removal of several proposed tax hikes and the establishment of a permanent charitable deduction for non-itemizing taxpayers. Those same tactics will be critical as not-for-profits face the next round of policy debates on Capitol Hill.
Lessons from the OBBBA Experience
When OBBBA was under consideration, not-for-profits faced potential tax provisions that could have significantly reduced the resources available for mission-driven work. Through coordinated outreach and clear messaging, the sector helped lawmakers understand how additional taxes, such as those on private foundations and employee parking benefits, would negatively affect their ability to serve communities.
The result was a favorable outcome: proposed tax increases were removed, and a permanent charitable deduction was secured for the 90% of taxpayers who do not itemize their returns. This achievement underscored how effective storytelling and sector-wide advocacy can shape legislative outcomes in ways that strengthen philanthropy and community investment.
Renewed Legislative and Tax Policy Risks
While the OBBBA chapter has closed, the possibility of renewed legislative threats remains. Congressional tax committee leaders have indicated that certain tax measures removed from the bill could resurface in future discussions, potentially aimed at raising federal revenue through changes to the tax-exempt sector.
At the same time, increased scrutiny of not-for-profits by both Congress and the White House has created a more cautious political environment. Organizations should be prepared for heightened oversight, expanded reporting expectations, and new compliance requirements that could emerge as part of broader fiscal reform efforts.
IRS Reform: A Double-Edged Sword
Lawmakers are also considering an Internal Revenue Service (IRS) reform package, one that could have both positive and challenging implications for charitable organizations.
On the positive side, reform could simplify tax filing for 501(c)(3)s, reduce administrative delays, and strengthen donor privacy protections. However, critics of the not-for-profit sector may push for additional disclosure requirements, including the reporting of foreign donations or international grantmaking data.
There is also discussion around potential changes to Form 990, the core financial disclosure document for not-for-profits. While reform could bring useful modernization and transparency, poorly designed amendments could also increase administrative burden and compliance costs.
Potential Progress on Retirement and Giving Incentives
One area that may offer bipartisan cooperation is retirement reform. Lawmakers are considering proposals that could support not-for-profit employees and encourage greater charitable participation.
This may include enhancements to 403(b) retirement accounts and adjustments that allow individuals with IRAs to make charitable contributions through donor-advised funds more easily. If these proposals gain traction, they could help not-for-profits attract and retain talent while also promoting philanthropy among donors.
The Importance of Advocacy and Engagement
Not-for-profits operating in today’s political environment face both heightened scrutiny and new opportunities to shape policy. Advocacy will play a central role in determining which direction future legislation takes.
During OBBBA negotiations, the not-for-profit sector’s unified, fact-based approach helped remove several unfavorable provisions and secure lasting charitable incentives. That success demonstrates the power of consistent, constructive engagement. As Congress revisits fiscal and tax policy in the months ahead, not-for-profits must continue to advocate early, collaborate with allies, and present practical policy solutions that highlight their community impact.
By engaging lawmakers in a proactive and solutions-focused manner, not-for-profits can ensure their perspectives are included in policy decisions that directly affect their missions.
How De Boer, Baumann & Company Can Help
At De Boer, Baumann & Company, we understand that legislative changes can have significant implications for not-for-profit organizations. Our team helps clients interpret emerging policy developments, assess financial risks and opportunities, and plan strategically in response to evolving regulations.
By staying informed and engaged, not-for-profits can navigate uncertainty with confidence, protecting their resources, strengthening compliance, and continuing to deliver vital services to the communities they serve.
To read the full article by Geoffrey Paul, please visit The NonProfit Times.