AFN Advocacy Update
AFN Advocacy Update: What the 'One Big Beautiful Bill' Means for Central Appalachia
May 28, 2025
At the Appalachia Funders Network, we do not take lightly the decision to issue a comprehensive advocacy alert. But last week the US House passed its tax and budget reconciliation package, officially titled the "One Big Beautiful Bill Act" (H.R.1). This bill now advances to the Senate, and we must speak plainly about what is at stake for Central Appalachia.
This bill contains a mix of provisions—some mildly beneficial, but many severely damaging—that will significantly impact our region's funders, nonprofits, community development ecosystem, and long-term resilience. As a network committed to the equitable transition of Central Appalachia, we urge you to act, share your stories, and contact your Senators immediately. The President has urged for a final vote on this bill by July 4th.
What's In the House-Passed Bill
✔ Positive Developments, thanks to your calls and efforts…
The provision allowing the Treasury Secretary to revoke nonprofit status without due process has been removed.
The UBIT (Unrelated Business Income Tax) provision that would have taxed nonprofits on name/logo licensing income has also been removed.
A limited universal charitable deduction for non-itemizers ($150 individual / $300 joint filers for 2025–2028) has been included.
❌ Harmful Provisions That Remain
Tiered Private Foundation Excise Tax Increase: Foundations with assets over $50 million will face steep increases, up to 10% for the largest. This could reduce grantmaking significantly. At the moment, Appalachia relies heavily on outside funders—nearly 73% of philanthropic investment comes from beyond the region.
Note: This webpage is password protected. Please use TheAppNetwork2010* To gain access.
Corporate Giving Floor: A new 1% floor means corporations must give over 1% of taxable income to deduct charitable contributions, which could chill corporate philanthropy.
No Extension of the New Markets Tax Credit (NMTC): Despite its proven impact in rural and distressed communities, the NMTC, which is set to expire at the end of 2025, was not extended in the House Ways and Means Committee draft tax bill. S. 479 calls for a permanent extension of the NMTC, which we strongly prefer, though our primary concern is that the Senate reconciliation tax legislation must include an extension of the NMTC.
What This Could Mean for Appalachia's Funder and Nonprofit Ecosystem (Starting in 2026)
Reduced Grantmaking Capacity: As noted in our recent "State of Funding in Appalachia" report, outside funders already play an outsized role in supporting the region. Increasing excise taxes on these foundations may decrease the flow of resources, particularly to rural areas. There are far better ways to reform the sector than blanket tax increases on private philanthropy endowments.
Weakened Corporate Giving: In a region that is just beginning to see increased private investment and philanthropic engagement, the 1% floor on deductions could reverse hard-won progress.
Loss of New Markets Tax Credits Jeopardizes Rural Investment: Over 30% of 2024 NMTC projects served rural communities. NMTC enables community-led revitalization of health centers, manufacturing sites, and childcare facilities in places where traditional capital rarely goes. Reminder - those who visited EO in Abingdon, VA during the Funder’s Tour at the AFN Gathering have seen firsthand the impact of these credits.
Threats to the CDFI Fund: See the recent statement from our friends at Opportunity Finance Network.
Threats to Health and Nutrition Access: The bill includes deep cuts to Medicaid and introduces work requirements projected to eliminate coverage for over 8 million people—many in rural regions like Appalachia (more than 40% of Eastern KY residents rely on Medicaid, see the map). Proposed changes to SNAP would shift administrative and financial burden to states, straining already limited resources. These cuts would leave many to choose between groceries, medication, and heating.
Higher Education and Student Loan Reforms Harm Rural Students: Tighter eligibility for Pell Grants and the elimination of subsidized student loans would make higher education more costly and less accessible for Appalachian youth—especially first-generation students.
Environmental and Energy Rollbacks Increase Risk: Provisions to roll back clean energy tax credits and environmental safeguards, while expanding fossil fuel extraction on public lands, would reverse climate progress and deepen long-term ecological harm in a region still recovering from extraction, flooding, and underregulated development.
Philanthropy Alone Can’t Fill the Gap Left by Federal Cuts, especially if it faces an increased tax burden: Central Appalachia’s civic infrastructure is already stretched thin, with nonprofits facing chronic underfunding and limited capacity. Proposed cuts to federal safety net programs—ranging from healthcare to housing to disaster response—would exacerbate this fragility. Even if all foundation endowments were spent down at once, it would only replace federal social spending for 76 days (See Urban Institute’s share of risk by state). The scale of need requires robust public investment. Philanthropy must remain a partner, not a substitute, for public responsibility.
Energy, Environment, and Public Health Threats
Our partners at Appalachian Voices have raised additional concerns:
The bill weakens environmental protections and allows energy/infrastructure projects to bypass community reviews.
It rescinds funding for reforestation, remediation, and rural energy justice programs.
It increases resource extraction mandates on public lands.
In a recent press release, Chelsea Barnes, the Director of Government Affairs and Strategy at Appalachian Voices, spoke succinctly about the implications of this legislation recently, saying in that for the wealthy removed from the conditions on the ground, this may be a “beautiful bill…but it’s terrible for everyday Appalachians.”
What You Can Do
Immediate Actions:
Contact your U.S. Senators. Ask them to Defend Philanthropic and Funder Freedom:
Oppose the excise tax increase and the corporate giving floor.
Reauthorize the New Markets Tax Credit (NMTC) and keep the CDFI Fund especially for rural places.
Protect and fully fund the Appalachian Regional Commission.
Preserve environmental and community review processes.
Expand and make permanent the universal charitable deduction.
Amplify Our Voice:
Share stories of how funding cuts or NMTC and other investments would impact your communities.
Use talking points and toolkits from:
This Isn’t Just About Tax Policy—It’s About Appalachian Lives.
Our region is still recovering from Hurricane Helene, catastrophic flooding, and systemic underinvestment. As FEMA leadership is removed and disaster response is politicized, this bill would gut the very civic and financial infrastructure we rely on to rebuild.
AFN members have always stood together to advance a just transition. This is one of those moments.
Let’s raise our voices and ensure Appalachia is not left behind.
In solidarity,
Ryan