The introduction of the 1% floor on corporate charitable deductions, imposed by the One Big Beautiful Bill Act (H.R.1) for tax years beginning December 31, 2025, has created a range of new considerations for companies to weigh in determining their corporate philanthropy strategy.
To support NationSwell members in navigating this shift, we interviewed a Head of Corporate Impact at a Fortune 500 company who has made several critical moves to set up their resources and programs for long-term sustainability.
The following resource outlines the steps taken over the course of approximately three months, each of which required close cross-enterprise collaboration. The processes and decisions described are intended to help leaders frame their own approaches, but should be considered within each organization’s own financial, legal, and tax context.
The steps outlined are:
- Step 1: Align internally on the policy landscape
- Step 2: Calculate the incremental tax impact to the business
- Step 3: Fund philanthropy budget with tax-efficient capital
- Step 4: Reclassify some philanthropy as ordinary business expense
- Step 5: Take a multi-year view on philanthropic tax strategy
