TUCSON, Ariz. (KGUN) — A wide-ranging budget bill making its way through U.S. Congress has some nonprofits and their supporters saying they're watching closely.
The bill, referred to as the 'One Big Beautiful Bill' by President Donald Trump, includes a proposed tax increase for some private foundations' investment earnings.
That's concerning to Community Foundation for Southern Arizona CEO Jenny Flynn. She says the past few months have already been rough for the nonprofit sector.
While they're used to operating off a slim margin, federal funding cuts have tightened that margin, causing layoffs and stopping some services.
"If you squeeze and squeeze and squeeze, at some point, there's no juice left," Flynn said.
Flynn says that while most of a nonprofit's revenue comes from fees, merchandise and service costs, for many, the second largest funding source comes in the form of grants from the federal government.
If the bill passes with this proposed tax on foundation investment revenue, she says nonprofits will likely lose even more funding.
“If you also take away some of the funding available for grants for private foundations," Flynn said, "you’re squeezing more.”
The current laws allow private charitable foundations to tax their investment revenue at a flat rate, but the bill suggests changing that to a tiered system.
“Those taxes would then be removed from the amount available for grant making," said Flynn. "More money to the government and less money to the community.“
To Flynn, that means another loss in funding to nonprofits at a time when demand is growing.
“People who have been relying on Medicaid for their healthcare or on some food support to feed their families don’t have that anymore," She said. "So where are they going to turn to get services? They’re going to at least in part be turning to nonprofits.”
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Alex Dowd is a multimedia journalist at KGUN 9, where her work combines her two favorite hobbies: talking to new people and learning about the community around her. Her goal is to eventually meet every single person in Tucson. Share your story ideas with Alex via email, alex.dowd@kgun9.com, or connecting on Instagram or X.
