H.R. 1 or the One Big Beautiful Bill (OBBB) was the sweeping tax legislation signed by the President in July. The bill introduces a range of changes to the US tax code that will be implemented over the next decade, including the creation of a universal charitable deduction. However, nonprofit leaders warn that the measure will ultimately harm millions of Americans by weakening the nonprofit sector’s ability to meet growing needs—needs that are increasingly going unmet by both government and the private market.

Below is a summary of key provisions that will impact nonprofits across the country.

• Medicaid and SNAP Cuts
  • Changes to Medicaid work requirements could put 9.9-14.9 million people at risk of losing coverage by 2034. Similarly, reductions to SNAP eligibility and benefits will drive immediate surges in demand for nonprofit food and health services, despite concurrent cuts to funding for those services.
  • These cuts would have an outsized impact on rural areas, where access to care is limited and roughly 1 in 4 individuals relies on Medicare. Estimates show that Utah stands to lose $1.4-1.5 billion in lost funding to providers and plan administrators.
• Immigration Enforcement Expansion
  • H.R. 1 allocates $180 billion to ICE over four years, aiming to intensify deportations and detentions, affecting refugees, trafficking survivors, and undocumented immigrants. These actions contribute to economic harm in Utah, where in 2022, undocumented individuals contributed ~$235 million in state tax contributions. Learn more.
  • Additional Medicaid and food assistance cuts would impact Utah’s ~375,000 immigrants and refugees, including residents who are lawfully present, as they will face restricted eligibility for health coverage.
• Health Care Cost Increases
  • Terminating enhanced ACA marketplace tax credits will raise costs and increase the number of uninsured individuals by 65%.
    • Forecasts estimate that the changes will cause an increase of up to 180,000 uninsured residents in the state, lead to higher healthcare costs, and reduce federal funding for providers. Health policy researchers estimate that Utah will see a 15% cut in federal spending over 10 years, or between $4 billion and $7 billion. Learn more.
• Changes to Philanthropic Incentives
  • New thresholds will remove deductions for itemizers on the first .5% of charitable giving.
  • Corporations can only deduct charitable contributions exceeding 1% of their taxable income.
  • Additional taxes introduced:
    • Endowment excise tax for nonprofits (e.g., colleges) scaled up to 8% based on assets per student.
    • 21% excise tax levied on nonprofit employee compensation above $1 million.
    • Bright spot – the bill establishes a universal charitable deduction (up to $1,00 for individuals/$2,000 for couples) for non-itemizers, which covers about 90% of taxpayers.
• State Budget Burden
  • The law shifts costs to state and local governments, threatening services, especially in rural areas, due to increased administrative demands to implement things like the Medicaid work requirements.
• Call to action: Utah Nonprofits must speak out. While H.R. 1 is federal law, Utah’s legislators and leadership need to hear the on-the-ground impacts of how these changes will impact the people and communities served by nonprofits.

H.R. 1 will increase demand for nonprofit services while simultaneously cutting the funding these organizations use to provide them.  For a breakdown of the tax bill’s implications on nonprofits, view this chart from the National Council of Nonprofits.