Key takeaways for nonprofit leaders and financial managers
The newly enacted One Big Beautiful Bill Act (OBBBA) enacted in 2025, represents one of the most comprehensive fiscal and tax packages in recent memory. While some provisions open new opportunities for charitable giving, others introduce added complexity around compensation, excise taxes, and compliance.
At Jacobson Jarvis our focus has always been helping nonprofit organizations navigate financial change with confidence. Here’s a concise look at what this new legislation could mean for you:
1. Expanded Charitable Deduction for Non-Itemizers
For the first time since 2021, individual taxpayers who don’t itemize deductions can once again deduct charitable gifts, up to $1,000 (single) or $2,000 (joint).
Why it matters: This opens a new pool of potential donors who previously received no tax benefit for smaller gifts. Now’s the time to update donor communications and remind your supporters that every contribution can make a difference, and a deduction.
2. Changes to Major-Gift Deductions
For those who do itemize, new floors and adjusted limits may reduce the benefit of very large charitable gifts.
Impact: High-net-worth donors and corporations may revisit giving strategies. Clear messaging, stewardship, and transparency will be key in retaining long-time supporters.
3. Higher Excise Taxes on Compensation & Endowments
The Act broadens the 21 % excise tax on compensation above $1 million and introduces a more graduated excise tax on endowment investment income for large institutions.
What to do: Nonprofits with significant assets or well-compensated leadership should review pay structures and model potential tax exposure.
4. Federal Funding & Program Impacts
Reductions in federal support programs such as Medicaid and community grants may indirectly affect nonprofits providing health, education, and social services.
Next step: Assess your organization’s reliance on government grants and prepare contingency budgets for 2026 and beyond.
Action Checklist
- Revisit donor communications to highlight new deduction opportunities.
- Analyze compensation structures and endowment tax exposure.
- Forecast potential shifts in major-donor behavior.
- Stay proactive, plan now for how these changes may impact future budgets.
Our Commitment to You
At Jacobson Jarvis we’ve dedicated more than 30 years to serving nonprofits across the Pacific Northwest. Our specialists are already working through the OBBBA details to ensure our clients stay informed and compliant.
Contact us today to schedule a consultation about how the One Big Beautiful Bill Act may affect your organization’s tax strategy, audit planning, and funding outlook.