The Importance of Charitable Giving, State Think Tanks and the “Big, Beautiful Bill”
At the Platte Institute, our mission is simple: we work to remove barriers that limit growth and opportunity in Nebraska. We believe every Nebraskan deserves the freedom to pursue their version of the Good Life—our state’s own take on the American Dream.
Nonprofits like ours are vital to making that vision a reality. Across the country, charitable organizations provide real-world, free-enterprise solutions to some of society’s most pressing challenges—often stepping in where government can’t or shouldn’t. This flexibility to innovate and take risks is one of the nonprofit sector’s greatest strengths. Government should encourage and empower these efforts—not stifle them.
Yet, a proposal buried in the House version of the so-called “Big, Beautiful Bill” threatens to do just that. The measure includes a significant increase to the excise tax on net investment income for private foundations. While it may raise federal revenue, it would do so at the expense of charitable giving—leaving fewer resources for nonprofits working on the frontlines of reform.
We stand alongside our colleagues at The James Madison Institute, who touched upon these issues in a recent blog post:
State think tanks matter because they prove that ideas have consequences in the real world. Unlike federal think tanks that often engage in abstract debates with uncertain outcomes, state institutions regularly see their recommendations become law, their policy models adopted by other states, and their reforms improve people’s lives . . . .
Yet despite their proven effectiveness as democracy’s most productive laboratories, these essential institutions face a direct assault on their financial foundation. The tax changes buried within the Big, Beautiful Bill would dramatically increase the tax burden on private foundations—the philanthropic engines that fuel state think tank research. When foundations pay higher taxes to Washington, they have fewer dollars available for the grants that keep state-focused research institutions operating.
State-based think tanks like ours are proof that ideas matter. Our work directly influences public policy, leading to real reforms and measurable improvements in people’s lives. Increasing the tax burden on private foundations—the very entities that help fund our research—will weaken the ability of state think tanks to continue shaping meaningful, local policy change.
As Congress moves toward reconciling the final version of this legislation, it is our hope that lawmakers will recognize the value of the nonprofit sector and the indispensable role of private foundations. A truly “beautiful” bill should support, not undermine, the work of private organizations committed to building a better future.