Letter to Indiana Congressional Members: Protect Philanthropic Assets and Tax-Exempt Status

Dear Members of the Indiana Congressional Delegation,

On behalf of Indiana Philanthropy Alliance (IPA) and over 1,300 foundations and charitable organizations throughout the state, we thank you for your service and for your continued focus on policies that strengthen our communities. As you review the recently introduced reconciliation bill, we write to offer both appreciation and concern — and to urge thoughtful consideration of how the bill’s provisions will affect charitable giving and philanthropic capacity in Indiana.

We commend the inclusion of provisions that promote giving, such as the reinstatement of the universal charitable deduction. This measure marks a critical step toward broadening charitable participation and recognizes the generosity of all Americans, regardless of income level.

However, we are deeply concerned that other provisions would significantly hinder philanthropic resources at a time when charitable organizations are being asked to do more:

1. Tiered Excise Tax on Private Foundations

The proposal to impose a steeply tiered excise tax on foundation investment income — up to 10% for the largest foundations — is projected to divert over $200 million each year away from Hoosier nonprofits and into the Washington bureaucracy. Every dollar taxed is a dollar not invested here at home in faith-based institutions, education, disaster relief, and other community priorities.

2. Corporate Giving Restrictions

The introduction of a 1% floor before corporations can deduct charitable contributions may unintentionally disincentivize giving, especially among small and mid-sized businesses that are vital community partners. In a state like Indiana, where local employers play an outsized role in civic life, this change could disincentivize giving, and it threatens to disrupt long-standing partnerships between local business and local solutions.

3. Revocation of Tax-Exempt Status Without Due Process

Perhaps most concerning is the provision allowing the government to unilaterally revoke an organization’s tax-exempt status based on unverified allegations, without judicial review. While we wholeheartedly support national security, removing nonprofit status without due process sets a dangerous precedent.

4. Expansion of Unrelated Business Income Tax (UBIT)

The proposed changes to the Unrelated Business Income Tax (UBIT), including taxes on parking and transportation, is an example of regulatory overreach that increases compliance burdens and diverts unrestricted resources away from programs that are typically used for innovation, and community responsiveness.

Our Request

We urge you to...

• Support the universal charitable tax deduction
• Oppose the provisions that weaken charitable giving incentives and redirect philanthropic dollars from those in need to the government
• Maintain nonprofit independence and due process protections
   

Now is the time to reinforce—not restrict—philanthropy’s ability to invest in what works. Local knowledge, personal generosity, and entrepreneurial spirit must not be taxed to pay for government spending.

Thank you for your attention and for standing with Indiana’s charitable sector.  We are ready to work with you to preserve strong, independent, and effective philanthropy in Indiana and across the country.

Sincerely,

Claudia Cummings
President & CEO
Indiana Philanthropy Alliance

Members Who Have Made the Pledge

Ball Associates (Muncie, IN; District 5)

Brown County Community Foundation (Nashville, IN; District 9)

Central Indiana Community Foundation (Indianapolis, IN; District 5, 6, 7)

Community Foundation Alliance (Evansville, IN; District 8)

Community Foundation of Bloomington and Monroe County (Bloomington, IN; District 9)

Community Foundation of Howard County (Kokomo, IN; District 4, 5)

Community Foundation of Madison and Jefferson County (Madison, IN; District 9)

Community Foundation of Pulaski County (Winamac, IN; District 2)

Community Foundation of Randolph County (Winchester, IN; District 3, 6)

Community Foundation of St. Joseph County (South Bend, IN; District 2)

Crown Point Community Foundation (Crown Point, IN; District 1)

Decatur County Community Foundation (Greensburg, IN; District 9)

Dekko Foundation (Kendallville, IN; District 2, 3)

Dubois County Community Foundation (Jasper, IN; District 8)

Foellinger Foundation (Fort Wayne, IN; District 3)

Fulton County Community Foundation (Rochester, IN; District 2)

George and Frances Ball Foundation (Muncie, IN; District 5)

Glick Philanthropies (Indianapolis, IN, District 5, 6, 7)

Hamer D & Phyllis C Shafer Foundation (Muncie, IN; District 5)

Heritage Fund-The Community Foundation of Bartholomew County (Columbus, IN; District 6, 9)

Jasper Newton Foundation (Rensselaer, IN; District 4)

Legacy Foundation (Merrillville, IN; District 1)

LISC Indianapolis (Indianapolis, IN, District 5, 6, 7)

Miami County Community Foundation (Peru, IN; District 2)

Nonprofit Financial Solutions (Westfield, IN; District 5)

Northern Indiana Community Foundation (Rochester, IN; District 2)

Parke County Community Foundation (Rockville, IN; District 8)

Porter County Community Foundation (Valparaiso, IN; District 1)

St. Joseph Community Health Foundation (Fort Wayne, IN; District 3)

Starke County Community Foundation (North Judson, IN; District 2)

The Haxel and Walter Bales Foundation (Jeffersonville, IN; District 9)

The Honeywell Foundation (Wabash, IN; District 2)

Tipton County Foundation (Tipton, IN; District 5)

Wayne County Foundation (Richmond, IN; District 6)