New Taxes on Endowments and Foundations? Four Steps to Take Now
Published on June 25, 2025
New tax provisions in legislation recently passed by the US House of Representatives (the House Bill) would impose millions of dollars of new costs on many colleges, universities, and private foundations, if enacted. We recommend four steps nonprofit organizations can consider right now, without being too hasty, to ensure they are well-prepared and responsive should the proposals become law:
- Understand what might be changing: Follow the new proposals, including how they may evolve or change as the legislative process progresses.
- Assess the trade-offs and difficult choices: Analyze how the organization would be affected by the new proposals—if at all—and the trade-offs that additional tax burden could introduce between current spending and the future role of the endowment.
- Know what you own (and what to do with it now): Update the tax cost basis of the organization’s investments and consider transactions, like potential sales of investments with significant built-in gain, that could be worth taking before any new tax proposals are effective.
- Plan ahead for tax-favorable strategies should the new rules be enacted: Consider potential changes in investment strategies and implementation that could mitigate additional tax costs from the new proposals.
To watch our recording from June 5 on “Excise Tax Hikes: Is Your Endowment Ready?” click here.
Read the rest of the publication here.