We are sounding the alarm and calling for support.
A new tax proposal released Monday, May 12 by the House Ways and Means Committee poses a grave threat to the entire nonprofit and philanthropic sector. If enacted, it would:
- Impose a new tiered tax of up to 10% on foundation investment income,draining critical resources away from nonprofits and the communities they serve.
- Grants unchecked power to the U.S. Treasury Secretary to unilaterally revoke a nonprofit’s tax-exempt status without due process, oversight, or clear standards. This opens the door for this administration to target nonprofits based on ideology or political dissent.
We’ve seen similar provisions proposed in last year’s failed H.R. 9495, and more recently, threatening remarks were made to revoke tax-exempt status for groups that do not share this administration’s policy views. These provisions represent a broader threat to nonprofit independence and undermine vital services and support systems for millions of people.
This is a real and urgent threat to the programs and services that keep communities strong — housing, health care, childcare, education, food access, disaster response, and more. When that support is undermined, it’s not just nonprofits at risk, it’s the people and families who rely on these lifelines every day.
The FUND for Santa Barbara stands with Southern California Grantmakers, United Philanthropy Forum, and Council on Foundations in strongly opposing these provisions. We urge our fellow foundations, local and national partners, and community members to act with us. As a reminder, private foundations are legally allowed to engage in advocacy under the self-defense exception, as these provisions directly impact their ability to carry out charitable work.
The next 48-72 hours are critical. Committee mark-up is underway, and a potential floor vote will take place next week. Take action now:
- Call our California Representatives on the House Ways and Means Committee, Reps. Judy Chu, Jimmy Gomez, Jimmy Panetta, Linda Sánchez, and Mike Thompson, using phone scripts from United Philanthropy Forum.
- Contact Rep. Salud Carbajal and urge him publicly oppose provisions that threaten nonprofit services and civil society.
- Send an email. Use the email templates created by United Philanthropy Forum to oppose the foundation tax provision and tax-exempt status revocation provision.
- Access additional resources. Visit the United Philanthropy Forum’s Protect Philanthropy Action Center, read their latest statement, access the Council on Foundations’ summary of the tax bill, as well as this summary and action items from National Council of Nonprofits.
- Support The FUND by making a donation to continue grassroots advocacy to defend our values.
