The “Big, Beautiful Bill” is a Big, Devastating Threat to Nonprofits

By Gabriel Neuman, Policy Counsel & Government Relations Manager

Last Monday, House Republican leadership in the Ways and Means Committee approved a sweeping and controversial tax package known as the “Big, Beautiful Bill.” Despite the name, this legislation is anything but beautiful for nonprofits.

If passed, it would deal a devastating blow to the nonprofit sector—especially those focused on scholarships, education, community care, and LGBTQ+ advocacy. Here’s what’s at stake:

What’s in the Bill?

The bill includes several alarming provisions that would directly harm nonprofit organizations:

  • Excise tax increases on private foundations—potentially rising to 10% of their net assets annually.

  • Unprecedented power granted to the Treasury Secretary to unilaterally revoke a nonprofit’s tax-exempt status if deemed to support terrorism—with no due process.

  • Caps and restrictions on corporate charitable giving, discouraging the very investments that fund scholarships, research, and community grants.

  • New taxes on essential employee benefits like transit stipends and parking—excluding religious organizations.

Every dollar lost to these provisions is a dollar not reaching the communities nonprofits serve. And for organizations like GSBA, that translates directly into fewer scholarships awarded, fewer services provided, and fewer lives changed.

You can find more information about the bill here, and read a statement by Diane Yentel, CEO of the National Council of Nonprofits, highlighting harmful elements of the bill here.

How This Hurts Scholarship Programs

This bill takes direct aim at the critical work we—and many others—do to support rising leaders:

  • Private foundations could lose up to 10% of net assets each year to taxation, cutting the ability to fund scholarships.

  • Smaller community-based funders might freeze or scale back award programs in the face of new financial burdens.

  • Nonprofits offering scholarship programs could be stripped of their status without any warning or review process.

  • Corporate donors may give less as deduction incentives shrink, leaving scholarship providers with fewer resources.

We encourage you to read the National Council of Nonprofits statement by Diane Yentel, which outlines the broader harms this bill presents.

Why This Matters to GSBA

For GSBA and our community, the implications are serious:

  • We could face increased taxes on benefits for the staff who run our Scholarship & Education Fund.

  • The risk of arbitrary status revocation from the Treasury Department introduces instability for LGBTQ+-serving organizations like ours.

  • Our donors—especially corporate partners—may reconsider their giving due to lower or eliminated tax benefits.

What’s Being Done

GSBA has joined a national response.

Alongside nonprofit-serving organizations across the country, we’ve signed on to a letter coordinated by NGLCC (National LGBT Chamber of Commerce) urging Congressional leaders to oppose this bill and protect the nonprofit status of chambers of commerce and similar organizations.

This effort is just one of many underway to sound the alarm and stop these harmful provisions.

What You Can Do

We need your voice—now.

📣 Contact your Representatives. Especially those in Republican districts, and tell them this bill would devastate nonprofits in your community—housing providers, food banks, arts orgs, and LGBTQ+ community groups alike.

📣 Share this blog post with your network. The more people who know what’s at stake, the louder our collective voice will be.

📣 Talk to your corporate partners and donors. Let them know how this would reduce charitable giving and threaten the work we do together.

What’s Next?

The bill is expected to go to a House floor vote this week, with Republican leadership hoping to pass it ahead of Memorial Day. However, there is dissent within their ranks—some Freedom Caucus members have threatened to oppose the bill over concerns that it doesn’t go far enough in cutting Medicaid and SNAP benefits. Meanwhile, former President Trump is publicly urging Republicans to unify behind it.

After the House vote, the bill would head to the Senate for debate and potential passage.

This is a critical moment. Let’s raise our voices and stand together for nonprofits, for our communities, and for the students who count on us to keep fighting for their futures.

– Gabriel Neuman
GSBA Policy Counsel & Government Relations Manager
gabrieln@thegsba.org