Tax laws may encourage individuals and businesses to give to charitable organizations whose missions they support by providing an itemized deduction or tax credit. The 2017 federal tax law had the unintended consequence of diminishing federal giving incentives, and the 2025 budget reconciliation bill includes several provisions on charitable giving that will affect nonprofits in coming years. State tax reform efforts in recent years have considered capping or eliminating charitable giving incentives, which would also have adverse effects on charitable giving.
Federal Charitable Giving Incentive
Changes to federal charitable giving incentives in the 2025 budget reconciliation bill will affect charitable nonprofits.
State Charitable Giving Incentives
States have found that capping or eliminating charitable giving incentives significantly undermines financial support for the work of nonprofits.