Editorial Note: This is a developing story. Congress was still debating the elements of the bill at the time of publication.
WASHINGTON, D.C. – Over the past week, U.S. political circles have been focused on the dubbed “One, Big, Beautiful Bill,”a sweeping legislative package spearheaded by House Republicans and strongly backed by former President Donald Trump. The bill aims to make permanent many of the provisions of the 2017 Tax Cuts and Jobs Act, while layering on a range of new tax breaks, regulatory changes, and spending initiatives. Branded by supporters as a transformative step toward economic recovery and border security, the legislation combines previous tax cuts from the first Trump administration with additional policy priorities on health care, energy, immigration, and even artificial intelligence.
The White House describes the bill as a bold affirmation of Republican priorities. It promises to eliminate federal taxes on tips, overtime wages, and car loan interest for vehicles assembled in the United States. It also offers tax relief to Social Security recipients and provides an additional deduction for seniors.
Besides the ambitious effort to make the 2017 tax cuts into permanent law, the bills also introduce new provisions such as “MAGA” savings accounts for children, expanded adoption credits, and financial incentives for American energy producers. Budget reconciliation is the chosen vehicle for its passage, allowing Senate Republicans to bypass a filibuster and pass the measure with a simple majority in the Senate (the Byrd rule), provided it adheres to budgetary rules.
But not all Republicans are on board. Prior to the late-night committee vote, Rep. Chip Roy (R-TX) expressed deep concern over the fiscal cost of the measure. “We are writing checks we cannot cash, and our children are going to pay the price,” Roy said, signaling that despite leadership support, internal opposition remains.
Speaker of the House Mike Johnson, however, framed the Budget Committee vote as a crucial victory. “There’s a lot more work to do,” Johnson acknowledged. “But I’m looking forward to very productive discussions over the next few days, and I am absolutely convinced we’re going to get this in final form and pass it in accordance with our original deadline, and that was to do it before Memorial Day.” The bill now heads to the House Rules Committee, where final edits will likely reflect negotiations between fiscal conservatives and moderates in high-tax states.
United States House of Representatives chamber at the United States Capitol in Washington, D.C. [public domain
While mainstream media coverage has largely focused on tax cuts, immigration, and energy policy, the bill includes several provisions that could directly or indirectly affect the nonprofit sector, including religious and Pagan organizations. Most significantly, the legislation contains multiple tax-related changes impacting nonprofits, especially those registered as 501(c)(3) charities.
Three provisions appear relatively neutral or even beneficial in the draft sections. Section 110112 reintroduces a limited charitable deduction for taxpayers who do not itemize, allowing single filers to deduct up to $150, or $300 for joint filers, for cash donations to qualified charities (excluding donor-advised funds and supporting organizations). Section 110109 establishes a new tax credit for individuals who donate to scholarship-granting nonprofits for K-12 students from low- to moderate-income households. Another provision, Sections 110115–116, creates “MAGA Accounts”—tax-advantaged savings plans for children, which may receive contributions from nonprofits. Contributions from religious or charitable organizations to these accounts are not subject to the standard $5,000 cap, provided they are made to a broadly defined group, such as all students in a district.
However, the bill also contains several more restrictive measures that could present challenges for nonprofit institutions, particularly private foundations, universities, and large religious organizations.
Section 112021 introduces a tiered excise tax system on university endowments based on their size. The new rules count additional forms of income, such as royalties and student loan interest, when calculating taxable investment income, although certain religious institutions may be exempt. Section 112022 similarly raises taxes on large private foundations, setting new rates ranging from 2.78% to 10%, depending on total assets.
Further changes include Section 112024, which requires nonprofits to count transportation benefits (like employee parking or transit subsidies) as unrelated business taxable income (UBTI). Section 112025 expands UBTI to include income derived from licensing an organization’s name or logo, such as merchandise branding. Section 112026 limits UBTI exemptions for research income to projects whose results are publicly available, meaning proprietary or private research may now be taxed.
US Capitol [Photo Credit: S. Ciotti
The features of the sections above are really for the purswardens and treasurers of our organizations, but they require mindful attention nonetheless.
A more controversial provision, Section 112209, was struck from the bill this morning on May 19, after criticism from civil liberties and nonprofit advocates. The removed section would have granted the Treasury Department the authority to revoke a nonprofit’s tax-exempt status if it was deemed to have provided material support to a designated terrorist organization, even unintentionally. While the provision included some procedural protections and carved out exceptions for humanitarian aid, advocacy groups warned that it could be used to unfairly target politically sensitive organizations or stifle charitable activity abroad. The Council on Foundations strongly opposed the measure, warning that it could “open the tax code to weaponization and abuse.”
The removal of Section 112209 is seen by many as a partial victory, but concerns remain about the broader tone of the bill toward nonprofits and civil society. While it provides tangible tax benefits and incentives for charitable giving, it also introduces regulatory and fiscal hurdles that could disproportionately affect large institutions and those engaged in research, international aid, or branding.
So, what does all this mean for the Pagan community?
As the bill moves toward a full House vote, Pagan and other minority religious organizations should remain attentive. Direct impacts may be limited, but as many Pagan churches and organizations, including local congregations, educational organizations, and interfaith nonprofits, operate under 501(c)(3) status, the bill’s changes to nonprofit taxation could affect everything from how groups fundraise to how they report income from events, merchandise, or research. Organizations that legally accept donations could see some new opportunities, but also new obligations and scrutiny. Overall, the bill does signal a shifting landscape for the nonprofit sector—one that demands vigilance, advocacy, and careful planning.
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