How Will "The One Big Beautiful Bill" Affect Corporate Giving?

After months of debate and numerous markups, the One Big Beautiful Bill Act, or OBBBA, became law on July 4, 2025, following its passage through both chambers of Congress and approval by President Trump. 

The bulk of the attention surrounding the law has to do with its many tax provisions. In many cases, the OBBBA simply extended changes made by the 2017 Tax Cuts and Jobs Act. However, the newest law introduces a few wrinkles for corporations wishing to itemize their charitable giving. 

These seemingly minor changes might necessitate new strategies for corporate giving. We’ll go over the OBBBA’s pertinent provisions and suggest ways to maximize tax benefits in the face of these new regulations. 

Table of Contents:

• The New 1% Floor
• Anticipated Effects of the OBBBA’s Corporate Giving Provisions
• One Solution? The Tax Advantages of Donor-Advised Funds (DAFs)
• Stay Ahead of Shifting Corporate Giving Policies with Groundswell’s Unique Digital Solutions

The New 1% Floor

The most notable change the OBBBA makes to corporate giving rules is establishing a floor for deductions. C corporations must now donate at least 1% of their annual taxable income in order to take advantage of itemized deductions. The law does not clarify whether corporations may only itemize contributions above the 1% floor or the entire giving amount. 

Anticipated Effects of the OBBBA’s Corporate Giving Provisions

Many, if not most, analysts in the corporate giving and non-profit spaces agree that the new rules will lead to fewer donations from companies. The Independent Sector, a coalition of nonprofits, foundations, and related entities, estimates that the OBBBA’s 1% floor could result in $4.8 billion less in corporate giving per year. That’s more than 13.5% of the total amount corporations gave in 2023.

A simple reason donations are expected to fall is that many corporations simply may not be able to give enough to enjoy favorable tax treatments. The median amount corporations give to charitable endeavors is around 0.86% of their pre-tax profits, which is considerably lower than the 1% floor. Some companies may increase giving to keep taking advantage of the deductions, but many will not. 

Groundswell anticipates this will squeeze smaller and mid-sized companies with tight margins. Our core mission is to make corporate giving more accessible to those types of companies, though, and we’re already thinking of solutions.

One Solution? The Tax Advantages of Donor-Advised Funds (DAFs)

Bunching, in the context of donor-advised funds, is the act of combining multiple years’ worth of corporate giving into one year for tax purposes. However, companies are under no obligation to actually donate the entire amount in a donor-advised fund (DAF) within 12 months.

Let’s say Widgets, Inc. (a fictitious company) generates $3 million in taxable income for 2025. Prior to the OBBBA, it had planned to donate $20,000 to charities that year and itemize their deductions. With the 1% floor, however, the company would need to donate at least $30,000 in 2025.

Let’s also say that Widgets, Inc. plans to donate roughly the same amount ($20,000) to charity for the next few years. Instead of spacing out the donations, the company contributes $60,000 into a donor-advised fund in 2025 and immediately takes the 2% deduction in that same year.

Because the money is in a DAF, the company can continually evaluate potential grant recipients and adjust its giving strategy as needed over the next few years.

While the company may not get to deduct charitable giving in multiple years, having a larger deduction in the current year is still incredibly helpful and allows for the tax advantages in the current year. Smaller businesses in rural parts of the country may be especially vulnerable to the new rule, and donation bunching through DAF may be the best way forward.

Groundswell’s DAF Procedures

For companies exploring ways to streamline their giving strategy, a corporate donor-advised fund (DAF) offers a smarter, simpler alternative to setting up a private foundation. Unlike foundations, corporate DAFs require no legal entity, no complex administration, and no minimum funding threshold.

With Groundswell, companies can launch and manage a corporate DAF in days—not months—and unlock all the same tax advantages without the overhead. Whether you're a fast-growing startup or an established enterprise, Groundswell makes corporate giving easier, more scalable, and more impactful.

Stay Ahead of Shifting Corporate Giving Policies with Groundswell’s Unique Digital Solutions

Donor-advised funds represent just one area of focus with our progressive, mobile-friendly corporate giving software. In addition to employee giving and donation matching, we also allow for the efficient management of employee volunteerism programs, employee assistance funds (EAFs), and grantmaking. 

Our software is easy to use and sends donations to recipients immediately, unlike many of the legacy platforms. We exist to democratize corporate giving because no company should feel like charity is out of reach.

We encourage you to book a demo with our customer service-oriented team to find out how we can help you change the world.