Policy update from our COO, Sutton Mora

(July 15, 2025) Sutton Mora, Executive Vice President and COO of the Community Foundation, co-chairs Philanthropy Southeast’s Public Policy Committee. She shares how the new One Big Beautiful Bill Act impacts nonprofits and donors—and how the Foundation is responding to serve them.

The One Big Beautiful Bill Act (OBBBA) was signed into law by President Trump last week on July 4, 2025, after the House of Representatives approved the Senate’s changes to H.R. 1, which passed the House by a narrow margin in May.

The OBBBA, with nearly 900 pages of provisions, reshapes policy across major sectors of the U.S. economy.

What it means for nonprofits:

• Nearly $1 trillion dollars will be cut from Medicaid over the next 10 years, and additional billions will be cut from food-assistance, environmental, and housing programs, among others. This will put new stressors on the nonprofit sector to continue to serve in those areas without available funds.
• That said, there will be new grant opportunities in border security, rural health, agriculture and rural development, workforce development, and other types of health and human services. According to Ryan Alcorn, CEO of GrantExec, “This dramatic reallocation of spending will have systemic and prolonged effects. The result is a federal grant marketplace that looks entirely different in FY 2026, forcing a massive and immediate reorganization of the nonprofit and public sectors.”

How the Community Foundation is responding:

Our two FOREVER Funds grant committees, Strengthening Nonprofits and Community Initiatives, have asked our Board of Governors for a brief, deliberate pause in initiating new grantmaking. Our staff has been surveying nonprofits across the Mid-South to try to gain a better understanding of how these changes are going to trickle down to our area. This fall, we will be announcing what our FY 2026 grantmaking will look like, knowing that this year will be unique and we will need to adapt to the changing needs of our nonprofit partners. Making sure people on the ground who need help continue to be served is our highest priority.

What it means for donors:

• All taxpayers, even those that don’t itemize, can take a charitable deduction now, although the limit is small. You’ll be able to take a $1,000 deduction for individuals and $2,000 for couples. It only applies to cash contributions and does not apply at all to contributions made to donor-advised funds.
• Tax write-off for the wealthiest of donors will now be limited. If you do itemize, you will not receive a tax benefit until your contributions exceed 0.5% of your adjust gross income. This deduction will be capped at 35%
• There is no sunset provision for the estate tax exemption. The 2025 exemptions will be $13.99 million for single filers and $27.98 for couples. They’ll rise slightly to $15 million and $30 million, respectively, in 2026. This means that purely estate tax-based incentives to give to nonprofits will only apply to the ultra-wealthy. In other words, whatever you contribute to charity during your life or in your estate will likely be for reasons other than a tax deduction.

How the Community Foundation can help:

Our Philanthropic Services team is poised to meet with any fund holder, and any of your professional advisors, to develop how to get the most out of your charitable giving—at no cost to you for that philanthropic advising. Email Vice President of Philanthropic Services Veronica Jamison or call her at (901) 722-0034 with any questions or thoughts you might have. We’ll help you develop a personalized plan for you and your family.

This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.