Estimated Increases in Taxes on Net Investment Income for US-Based 501(c)(3) Private Foundations

Increasing taxes on private foundations means fewer dollars to charitable organizations, from food pantries to disaster relief groups. The below data from Candid shows that in almost every state, private foundations will have to pay millions more in taxes, crippling their ability to respond to the crises of today and tomorrow. As federal funding decreases and needs in communities continue to grow, Congress should be making it easier for private donors to support community needs, not harder.

Note: Important disclaimers and explanations of this data are below the table.

By State

Data Source

Candid created this file, that contains the most recently reported net investment income tax figures from US-based 501(c)(3) private foundations by state and proposed tax brackets (based on reported fair market value assets), plus estimates for taxes based on the proposed levels and the difference between the current and proposed dollars.

How should this data be interpreted?

At the national level:

Were the proposed tax rates in place for the fiscal years in the filings we are using for our analyses, US-based 501(c)(3) private foundations would see their taxes increase from around $1.03 billion to $3.93 billion, an increase of about $2.90 billion dollars.

At the state level:

Please refer to the “state” column to look up how this impacts a specific state. Here is an narrative example for the State of California: Were the proposed tax rates in place for the fiscal years in the filings we are using for our analyses, California based 501(c)(3) private foundations would see their taxes increase from $180 million to $783 million, an increase of about $603 million dollars.

Methodology

This analysis is based on the most recent available filings from active U.S. based 501c3 990-PF filers. Candid first confirmed that the foundations are still currently active (listed on any IRS Business Master File in calendar year 2024) and then included data from their most recent tax file since 2020. Within this dataset, 85% of the filings come from fiscal year end 2023 (the most recent year of comprehensive data). However, to allow for data lag issues due to differences in fiscal year ends and tax extensions, filing information was also used from 2020, 2021, 2022, or 2024 if that was an organization's most recent available information.
Estimates are calculated using the following formula:

(Current Taxes [990-PF Part V Line 5] ÷ 0.0139 [current tax rate]) × [new proposed tax rate based on assets; 0.0139, 0.0278, 0.050, or 0.100]

Calculated estimates are based on the tax brackets proposed in the “One, Beautiful Bill.”

Please note that foundation counts are based on number of available 990-PFs. Additionally, estimated increases are based on current available information, not projections. Figures are net investment income taxes only, not the total taxes owed by private foundations; other taxes may apply.

Have questions about this data?

For questions, please contact partnerships@candid.org.