I came across the article “Tax Bill Takes Shot at the Largest Foundations and Universities” from The Chronicle of Philanthropy. It discusses a proposed tax bill introduced by House Republicans today on May 13, 2025.

This bill aims to significantly increase excise taxes on the investment income of large private foundations and university endowments.

Here are some key provisions of the Proposed Tax Bill:

• Foundations with assets ≤ $50 million: Maintain the current 1.39% excise tax.

• Assets $50 million–$250 million: Tax rate increases to 2.78%.

• Assets $250 million–$5 billion: Tax rate increases to 5%.

• Assets ≥ $5 billion: Tax rate increases to 10%.

Here’s the impact: Major organizations like the Gates Foundation could face annual tax liabilities amounting to hundreds of millions of dollars.

The bill also proposes higher taxes on large university endowments, building upon the 1.4% tax introduced in the 2017 Tax Cuts and Jobs Act.

Here are a couple of things you can do if you work with a foundation or a university’s endowment:

Conduct Financial Impact Assessments: Evaluate how the proposed tax changes could affect your organization’s financial health and grant-making capabilities.

Engage in Advocacy Efforts: Collaborate with sector associations and policymakers to express concerns and advocate for the nonprofit sector’s interests.

Enhance Transparency and Public Engagement: Communicate the organization’s societal contributions and the potential adverse effects of increased taxation to stakeholders and the public.

Diversify Funding Sources: Explore alternative revenue streams to mitigate potential financial shortfalls resulting from higher tax obligations.

Monitor Legislative Developments: Stay informed about the bill’s progress and be prepared to adjust strategies in response to legislative outcomes.

For a more detailed analysis, you can read the full article here: https://lnkd.in/eNZuApcn