As the Trump administration’s “big, beautiful bill” enters the Senate, some philanthropic experts are ringing alarm bells about tax provisions that could ultimately curtail charitable giving. The impacts of the bill could be felt broadly, experts say, uniting Jewish philanthropy with the broader sector. 

According to Andres Spokoiny, president and CEO of the Jewish Funders Network, since the foundations that would be the most impacted are also some of the most prominent, lobbying efforts and responses to the legislation are being tackled well beyond the Jewish sector. 

“This affects the entire philanthropic community, Jewish and not Jewish,” Spokoiny told eJewishPhilanthropy. “There are a lot of conversations taking place in the secular field. So what is happening isn’t a specific Jewish response. It’s bigger than us, and it’s affecting people with much more firepower than us.” 

The bill, which cleared the House with a slim majority, is likely to change somewhat as it makes its way through the Senate, according to reports. President Donald Trump has called for the legislation to be passed by July 4. For now, the legislation would, among other things, raise the excise tax on the investment income of large private foundations from the current flat rate of 1.39% to a tiered system ranging from 1.39% to 10%, depending on a foundation’s assets. The rate would double to 2.78% for foundations with assets above $50 million, and to 5% for those with assets above $250 million. For foundations with over $5 billion in assets, the rate would increase to 10%. This change would become part of the permanent tax code.

Few foundations in the country would feel the impact of the highest rate. However, an excise tax increase to 2.78% or 5% could impact many actors within the world of Jewish philanthropy, among them Charles and Lynn Schusterman Family Philanthropies, the Jim Joseph Foundation and the Harry and Jeanette Weinberg Foundation — some of the Jewish community’s biggest funders.  

According to Avrum Lapin, CEO of the nonprofit consulting Lapin Group, a tax increase is unlikely to change the core funding plans of larger foundations. And yet, he said, if these foundations, which provide hundreds of millions of dollars in funding each year, pull back their giving even slightly, that would likely be felt deeply by grantees.  

“For a foundation that’s giving out $200 million a year and has a core strategy, if you take 5% out of it, that’s a lot of money. It may mean somebody at the end of the day might not get funded,” Lapin told eJP. “Or it may mean that they have to dig deeper into their principal.”

According to David Goldfarb, senior director of the Jewish Federations of North America’s Strategic Health Resource Center, a potential drop in funding would also come as nonprofits are being asked to do more in light of the Trump administration’s cuts to some federal welfare programs, such as SNAP and Medicaid.

Spokoiny described this as a potential “double whammy” for the philanthropic field, which will be pushed to do more with less.

“You risk a double whammy in which there’s more philanthropic need because of the cuts, the federal spending and what have you — and you have restrictions to philanthropy. It becomes a double whammy that makes everybody suffer,” said Spokoiny. “Precisely now that we’re going to need more philanthropy, we should make it easier for funders to operate.”

Depending on the economy’s well-being, the philanthropic sector could end up operating as much more of a donor’s market, Lapin added, requiring nonprofits to work harder to secure funding. 

“The nonprofits in the community need to be more creative and more innovative and really project their mission and communicate well in order to be able to attract the attention of donors and funders. But at the end of the day, the marketplace is about the donors,” said Lapin. “Doing things the way they’ve always been done is not a recipe for success.”

Lapin noted that the rising popularity of donor-advised funds, which aren’t targeted by the bill, could pad the legislation’s impact. And, he added, philanthropy is typically driven by passion, as evidenced by a spike in philanthropy amid the COVID-19 pandemic, despite economic constraints. 

Julie Platt, the chair of JFNA, told eJP that she has not seen a drop in Jewish donors’ or foundations’ willingness to give in light of the country’s current economic uncertainty. 

“I don’t see anybody holding back to wait to see what happens. We’re in too much of a moment. The generosity of the North American Jewish community is just astounding,” Platt said. “And literally there isn’t anybody I’ve asked to do anything or our team has asked to do anything that said, ‘No,’ both in philanthropy and in leadership. People want to serve. Everybody’s raising their hands.”

Goldfarb noted that in addition to general growing needs amid federal funding cuts, the Jewish community specifically is bearing added costs associated with rising antisemitism, which he said will put additional strains on the Jewish nonprofit sector.

“We have a whole range of new threats — security issues, antisemitism — but we also have our community provider network that we’re supporting. Losing access to those federal dollars, while there’s potential for tax impacts that could reduce [charitable giving] could put a lot of pressure on our systems,” said Goldfarb. “That’s exactly what we’re alerting Congress to when we lobby on the bill.”

As federal cuts thin state budgets overall, certain offerings under Medicaid will bear the brunt, highly reducing state capabilities to fund offerings such as at-home services for the elderly and those with disabilities, Goldfarb added. Philanthropy will be challenged to fill that gap, he said.  

“Philanthropy really can’t make up for the loss of federal dollars. If you look at how much is going into the systems on federal dollars versus private dollars, you know the differences are enormous,” Goldfarb told eJP. “Philanthropy plays a really critical role in supplementing those services — providing specialized services, ensuring high-quality facilities, for example. But federal dollars are what really run our health-care system.”

Less flashy facets of the bill could also touch Jewish philanthropy in unexpected ways. A controversial temporary provision under the bill would provide a tax credit for contributions to “scholarship-granting institutions,” which could be a boon for those looking to support Jewish day schools, for example. The bill would also reimpose the “unrelated business taxable income” to transportation benefits provided to employees of tax-exempt organizations, which may represent an additional expense for some Jewish nonprofits.

According to Spokoiny, between cuts to USAID and potential threats to equivalency determination in April, he’s felt a sense of exhaustion within the Jewish philanthropic sector. People have been too busy to delve deeply into each individual challenge, he said, making it difficult to preempt problems.   

“When you start analyzing one, you get hit by the other. Even if the threats don’t materialize, the process can be exhausting, and it ends up impacting funders’ capacity to react,” he said. “The bill is just one more thing to worry about.”

What most impacts philanthropy is the economy, said Spokoiny. But a growing list of potential restrictions to philanthropy has also left him concerned about the overall environment and private philanthropic freedom, he said. 

“I’m not so concerned about the bill itself, because the philanthropic community is resilient. We will adapt,” Spokoiny said. “I’m more concerned about an overarching climate in which philanthropy is being questioned or threatened, and where philanthropic freedom may be restricted.”