Treasury Secretary Scott Bessent has endorsed a package of nonprofit transparency bills amid changes to how charitable donations are taxed. Starting with the 2026 tax year, taxpayers claiming the standard deduction can write off up to $1,000 in cash charitable donations, or $2,000 for joint filers. Simultaneously, those who itemize deductions now face a higher threshold, with charitable gifts deductible only to the extent they exceed 0.5% of adjusted gross income.
Bessent made his position on nonprofit accountability public on July 23, stating that public money and tax-exempt status require public accountability. He indicated Treasury is taking action to prevent nonprofit status from being used to conceal fraud, abuse, and illegal extremist activity. The House Ways and Means Committee advanced four transparency bills on July 22, including measures requiring charities to publicly disclose fiscal sponsorship details, adding transparency requirements for foreign funding, restricting exempt status for groups routing foreign-linked money into political committees, and protecting religious organizations from IRS scrutiny based on beliefs about marriage or sexuality.
Individuals contributed $394.20 billion of the $617.20 billion in total charitable giving during 2025, the first year giving exceeded $600 billion. The nonprofit sector accounts for roughly 17% of the U.S. economy. Current tax code allows established charities to let unregistered groups operate under their tax exemption through fiscal sponsorship arrangements, creating accountability gaps that donors and regulators cannot easily address. Treasury announced in April that the IRS would revise Form 990 reporting to require clearer disclosure on government grants, contracts, and fiscal sponsorship arrangements.
All four bills advanced on party-line votes with nine Democratic amendments failing. Policy observers suggest the legislation faces long odds in the Senate, where 60 votes is typically required for passage. However, Treasury’s Form 990 revision does not require congressional approval and will proceed independently, ensuring that disclosure improvements reach donors regardless of legislative outcomes.
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