The budget reconciliation bill, formerly known as the “One Big, Beautiful Bill Act,” narrowly passed the House on Thursday, ending its monthslong trek to President Donald Trump’s desk, where it was signed into law on Independence Day, reports eJewishPhilanthropy’s Nira Dayanim.
According to Andres Spokoiny, president and CEO of the Jewish Funders Network, while the bill’s specific impact on Jewish philanthropy will take time to emerge, funders already feel squeezed by the compounded pressure of multiple wars in Israel, national political divisions and other factors.
“It’s a quadruple whammy, or quintuple whammy, really,” Spokoiny told eJP, referring to his initial description of the bill last month as a potential “double whammy” to the philanthropic sector. “You have increased costs of living. You have services and federal programs being cut, which affect the 25% of Jews who live below the poverty line. You have restrictions on philanthropic activity. You have the crisis in Israel that demands a lot of resources, and you have somebody who is likely to be in charge of New York City, threatening both spiritually, morally and economically, the Jews of the city, among them many philanthropists. So these are difficult times,” Spokoiny said, referring to Zohran Mamdani, the Democratic candidate for New York City mayor.
Two provisions that remain in the bill — a 35% cap on itemized deductions and a new requirement for corporations to donate at least 1% of their profits to be eligible for tax benefits — are expected to pinch philanthropic giving, according to research by the Indiana University Lilly Family School of Philanthropy, which estimated that these tax changes would result in an annual decrease of between $6.2 billion and $13 billion in charitable donations.
But the bill’s most significant impact on private philanthropy could be in raising the level of need for it to meet, due to cutbacks on welfare programs including Medicaid and SNAP, experts say. For instance, while the original bill proposed $800 billion in cuts to Medicaid over 10 years, the newest iteration will see over $1 trillion in cuts. Over the same period, the bill will also cut over $200 billion from SNAP.
Private philanthropy might attempt to fill the gap left by a rollback in federal funding, but it would amount to a drop in the bucket, David Goldfarb, senior director of the Jewish Federations of North America’s Strategic Health Resource Center, told eJP. “You really can’t compete with federal funding,” he said.
Some progressive Jewish groups have denounced the sweeping tax bill for its cuts and new restrictions on welfare benefits. Darcy Hirsh, senior director of government relations and advocacy at the National Council of Jewish Women, also noted that the bill includes less-discussed cuts to reproductive health care. “This budget will also end access to reproductive health care for millions of women by defunding and shuttering clinics across the country — which are, for many, the sole source of cancer screenings, STI testing, and prenatal care in their area. Buried in a massive bill filled with sweeping cuts, this attack on reproductive health care is intentional — designed to pass unnoticed as just another line item,” Hirsh said.
Some Jewish groups have hailed the Educational Choice for Children Act, a provision that will provide a tax credit for donations to scholarship granting institutions — including religious schools — as a boon for the broader Jewish community, if not the philanthropic sector specifically. “The OBBB is big and complicated, but one thing is simple: The largest ever federal school choice program is about to be signed into law by President Trump,” said Nathan Diament, the executive director of OU Advocacy. “This has been an OU Advocacy goal for decades, and we will continue to work to make sure every Jewish child can access an affordable Jewish education.”
According to David Greenfield, CEO of Met Council, his organization and others that provide food to food pantries are set up as additional support for those who already have SNAP benefits. As fewer people are able to receive those benefits, the demand could increase dramatically.
“[The need is] impossible to absorb,” Greenfield said. “There’s no one who believes that suddenly we’re going to get $250 billion a year in new private philanthropic funding. So what this really means is that the social safety net in the United States is being significantly eroded for people at the lowest income.”
Though the bill is likely to further strain the philanthropic sector, it is expected be a boon to philanthropists. According to the Institute on Taxation and Economic Policy, the new tax cuts are estimated to save the top 1% of families more than $1 trillion over the next 10 years.
Read the full report here.
