March is National Sauce Month, which feels appropriate. A good sauce can elevate everything around it — or, if left unattended, make a real mess of the kitchen. Right now, Congress is stirring a lot of pots at once: budget negotiations, tax proposals, and spending decisions that will determine what resources are available to nonprofits and the communities they serve. The sector has learned to keep a close eye on what’s simmering, because by the time something boils over, it’s usually too late to adjust the heat.
New Research Projects $5.7 Billion Annual Hit to Charitable Giving
New research from the Indiana University Lilly Family School of Philanthropy projects that tax changes enacted through the One Big Beautiful Bill — signed into law in July 2025 and now in effect — will result in approximately $5.7 billion less in charitable giving annually compared to what would have occurred under previous tax law. While the law does introduce a universal charitable deduction allowing non-itemizers to deduct up to $1,000 (or $2,000 for joint filers), those gains are outweighed by disincentives hitting higher-income donors and corporations. Building on their work with Independent Sector last year, the researchers find the new 35% cap on the value of itemized deductions is projected to reduce giving by high-income donors significantly, while a new 1% floor on corporate charitable deductions is estimated to cost the sector an additional $1.55 billion per year.
Researchers estimate the law may increase the number of giving households by approximately 8.7 million — potentially reversing a decades-long decline in donor participation. However, as one researcher noted, funding cuts from the federal government have already placed nonprofits under significant strain, and there is little expectation that increased charitable giving will make up that gap. The net effect is a sector that may be broader but considerably shallower — more donors giving less, at a moment when the need has never been greater.
Proposed Changes to SAM.gov Certifications
The General Services Administration (GSA) has proposed updates to certification requirements for current and future recipients of federal financial assistance, including grants, government-sponsored insurance, and loans. The proposed changes would impose new compliance language targeting DEI programs and immigration services — directly threatening the missions of many nonprofit organizations that serve vulnerable communities.
The proposal introduces serious risks for the sector. Vague and overbroad language leaves organizations uncertain about whether their programs or mission statements could trigger compliance violations, and a provision tying noncompliance to False Claims Act liability means that uncertainty carries real legal and financial consequences, including potential criminal penalties.
The public comment period closes March 30, 2026 — and there are two concrete ways to make your organization’s voice heard before that deadline. We encourage you to submit a public comment opposing the proposed rule and to sign on to the national letter opposing these changes. Both are critical tools for pushing back on the scope of this proposal and demanding clearer, fairer standards that protect the organizations doing essential work in our communities. Don’t wait — March 30 is the deadline for both.
IRA-to-DAF Charitable Distributions: Legislation Introduced in the Senate
Earlier this month, a bipartisan group of senators introduced legislation that could expand charitable giving options for older Americans. The IRA Charitable Rollover Facilitation and Enhancement Act (S. 3975), sponsored by Sens. Todd Young (R-IN), Michael Bennet (D-CO), James Lankford (R-OK), Catherine Cortez Masto (D-NV), and Maria Cantwell (D-WA), would amend the tax code to allow individuals to make qualified charitable distributions from individual retirement accounts (IRAs) directly to donor-advised funds (DAFs). This bill is the Senate companion to H.R. 2891, which was introduced last year by Reps. Adrian Smith (R-NE) and Jimmy Panetta (D-CA).
Under current law, IRA holders can make tax-advantaged charitable distributions, but DAFs are excluded as eligible recipients. This bill would remove that restriction, giving older donors more flexibility to consolidate and coordinate their giving — supporting multiple charitable organizations through a single distribution.
Growing Backlog Amid PSLF’s Pending Final Ruling
The future of the Public Service Loan Forgiveness (PSLF) program is increasingly uncertain, and the consequences for nonprofit workers are already being felt. Since the Department of Education released its Notice of Proposed Rulemaking — which would restrict employer eligibility based on a vague and overbroad definition of “substantial illegal purposes” — over 5,000 new applications have flooded in, pushing the existing backlog past 80,000 borrowers. That backlog isn’t just an administrative inconvenience; it represents real people in limbo, unsure whether the public service work they’ve built their careers around will count toward the forgiveness they were promised.
The proposed rule’s definition of “illegal purposes” is perhaps most troubling to the charitable sector. In practice, the language sweeps in organizations whose missions center immigration services, gender-affirming care, and DEI programs — work the current administration has targeted politically. As Forbes reported, the rule could effectively strip PSLF eligibility from nonprofit organizations, academic institutions, and Democratic-led state and city governments that oppose the administration’s policy goals. The Department of Education has argued the rule doesn’t restrict free speech, only illegal activity — but that framing obscures the reality that the definition of “illegal” is doing enormous political work here. PSLF was created by Congress in 2007 with broad bipartisan support, and the legislative intent was unambiguous: all 501(c)(3) organizations are eligible employers, and the law does not grant the Secretary of Education authority to determine which nonprofits qualify.
Multiple active lawsuits are currently challenging the rule, which is set to take effect in July 2026. But the harm is already unfolding. Borrowers are now questioning whether their employers will retain eligibility, and some are facing the prospect of leaving jobs they took specifically for PSLF — disrupting careers, families, and the communities that depend on the services these workers provide.
Travis Swanson is the Government Relations Manager at Independent Sector
