Senate removes foundation tax increase from Big Beautiful Bill, but philanthropies still on alert

Senate Republicans have removed a House-passed tax increase on private foundations from President Trump’s One Big Beautiful Bill, but philanthropic organizations are still worried it could end up in the final package.

Foundations and allied groups warned the tax increase would undermine charitable giving and the countless programs and services those donations fund.

“This enormous transfer of private resources to fund big government spending runs counter to conservative principles and the Trump administration’s efforts to reduce the size and scope of the federal bureaucracy,” the Philanthropy Roundtable and other free-market and conservative organizations wrote in a letter to Senate leaders this month.

“Instead of targeting the resources of private foundations, Congress should view them as the perfect partner to fill the gaps as policymakers roll back bloated and ineffective government programs,” they said.

The Senate got the message. The text of the Finance Committee portion of the budget reconciliation package released Monday did not include the tax increase on private foundations that was in the version the House passed last month.

“I’m in favor of nonprofits and being able to function as a nonprofit, because we need strong nonprofits,” Senate Finance Committee member James Lankford, Oklahoma Republican, told The Washington Times.

Nonprofits are exempt from most federal taxes, but under current law, private foundations have to pay an excise tax on their net investment income.

https://www.washingtontimes.com/news/2025/jun/19/senate-removes-foundation-tax-increase-big-beautiful-bill/