Tax Laws, What’s Pending, And Charitable Giving Solutions

Whether you’ve supported a fund at the Community Foundation, established your own fund, or are considering whether to get involved, it’s important to know that the team at the Community Foundation keeps a watchful eye on tax law changes that could impact your plans for charitable giving. 
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You’ve probably seen a lot of news about the so-called "Big Beautiful Bill" (H.R. 1), which passed the House of Representatives by a narrow 215-214 vote on May 22, 2025. The bill now heads to the Senate, where it’s expected to undergo significant changes before anything becomes final. The main point to keep in mind is that nothing is set in stone yet, and it’s impossible to know exactly how these tax law changes might affect you and your charitable giving until the process is complete.

Our team is happy to help you think about how you might update your charitable giving plans whether or not certain provisions in the proposed legislation are enacted into law.

For example, many people include provisions in their estate plans to continue supporting the causes they championed during their lifetimes. They like the idea of leaving a legacy to improve the quality of life in our community across generations. Next time you’re considering an update to your estate plan, please reach out. The Community Foundation team is happy to work with you and your advisors to structure a legacy gift that is meaningful to both you and the community you love.

Related to legacy giving, it’s important to note that although the federal estate tax applies to a relatively small percentage of taxpayers, the impact can be significant (currently the top rate is 40%). If the total value of your assets (including real estate, investments, retirement accounts, business interests, life insurance you own, and personal property) exceeds $13.99 million as an individual, or $27.98 million as a married couple, the estate tax could be an issue for you. You’re likely aware that higher estate tax exemption enacted under the Tax Cuts and Jobs Act of 2017 (TCJA) is set to sunset at the end of this year, but under the proposed legislation, the increased exemption would become permanent. If you’re nevertheless still anticipating the possibility of a taxable estate, incorporating a gift to a fund at the Community Foundation in your estate plan can help reduce the tax’s impact.

Of course, people don’t give to charity just for tax reasons. Whether or not you expect to wind up with a taxable estate, the Community Foundation can help you achieve your goals for making a difference in our community for years to come.

Another provision in the proposed legislation that might have caught your attention relates to the standard deduction. The bill would maintain the higher standard deduction levels from the TCJA and even add a temporary increase through 2028. As a result, fewer taxpayers would itemize deductions, which means fewer people would be able to claim a charitable deduction (although most people don’t support charities solely to get a tax deduction). The bill also introduces a modest “above-the-line” charitable deduction for nonitemizers in the amount of $150 for individuals and $300 for joint filers.

Finally, the bill would sharply raise excise taxes on the investment income of large private foundations, with rates going up from 1.39% to as much as 10% for the largest foundations. Foundations with less than $50 million in assets would not see any change. Remember that the Community Foundation offers alternatives to private foundations, including donor-advised funds, that allow you to support your favorite charities and address important local needs.

So what’s next? The Senate is expected to start reviewing the bill in June, and the process could stretch into July or August as both the House and Senate work out their differences before sending the bill to President Trump for signature. We’ll keep you updated as this develops. If you have questions or want to talk about your charitable giving options, please reach out. Our team is here to help you support the causes you care about and address community needs in the most effective ways possible, no matter what happens to tax laws.

​The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation