The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced one of the most consequential changes to corporate philanthropy in decades: a new 1% floor on corporate charitable deductions, meaning companies can only claim a tax benefit for contributions that exceed 1% of their taxable income. For corporate foundations and the nonprofits they support, this isn’t just a tax technicality, it’s reshaping how, when and why companies give.

Independent Sector estimates the 1% floor could result in roughly $4.5 billion in lost corporate charitable giving annually and reduce corporate charitable giving by approximately $45 billion over the next decade. And this is happening at exactly the wrong moment. Federal funding for basic safety-net programs is shrinking, which means more communities are turning to nonprofits just as one of their key funding sources is under pressure.

Charitable Dollars Are Moving into Marketing Budgets

When corporate dollars don’t hit that 1% threshold, they don’t just disappear. They get rerouted. Companies are increasingly looking at cause-related marketing, sponsorships and community partnerships for arrangements that can be expensed as a business cost rather than claimed as a charitable deduction.

That’s not automatically a bad thing. Many of these partnerships deliver real community value. But when giving moves from a foundation’s grant cycle into a company’s marketing budget, the stakes change. The partnership becomes public facing from living on websites, in earned media outreach, through marketing campaigns, at events and on social media. That visibility creates real opportunity and real responsibility. Nonprofits need to show up as authentic partners. FTC disclosure requirements around cause-marketing arrangements are real and often overlooked by organizations new to this space. Getting it wrong publicly is a different kind of problem than a declined grant application.

The measurement conversation shifts too. A foundation program officer and a CMO are asking fundamentally different questions. One wants community impact; the other must capture reach, engagement and brand lift. Nonprofits that can speak both languages will have a real advantage.

Most organizations weren’t built to have that conversation, and that’s okay; it’s just new territory. The ones that figure out how to make that connection without losing sight of their mission will be better positioned. At GroundFloor Media, it’s work we find ourselves doing more and more to help nonprofits tell their story in ways that resonate with key stakeholders while making sure the partnerships they enter are structured well from the start.

A Consolidation Moment in Nonprofits

The OBBBA isn’t the only pressure nonprofits are dealing with right now. It’s landing on top of reduced federal funding, rising costs and growing demand for services, and the combination is forcing some conversations that most boards never expected to have. Questions about whether an organization can survive independently, whether a merger makes sense and what happens to the mission if you combine forces should be thoughtfully considered.  

It’s happening now, especially in health and human services. But the pressure isn’t limited to any one industry. For a lot of organizations, exploring a merger or strategic affiliation isn’t about growth or ambition, it’s about keeping the mission alive.

These conversations are genuinely hard in ways that corporate mergers aren’t. Community trust, donor relationships, staff culture and organizational identity are all on the table. And the research is pretty clear that when boards focus on financial survival over program alignment, things tend to go wrong. Done well, consolidation can actually make an organization stronger and more credible to the corporate foundations looking for partners with real scale and staying power. Done poorly, it can undo years of relationship-building in a short amount of time.

For corporate foundations watching this play out, it’s worth asking what role they want to play. Some funders are already thinking about whether their grants, and the technical assistance that often comes with them, can help grantees approach these decisions carefully, before they’re in crisis mode. That’s a genuinely valuable thing foundations can do right now.

For nonprofits in the middle of these conversations, the process matters as much as the outcome. Getting the feasibility work right, communicating clearly with stakeholders, understanding what integration actually looks like day-to-day — that’s often where things succeed or fall apart. It takes people who know the sector and understand how organizations actually change, and it’s where our agency spends a significant part of our time.

What to Watch

We’re still in the early days of understanding what the OBBBA will actually mean for corporate philanthropy, and companies should consult their tax advisors as they sort through the implications. Some are already adapting, front-loading contributions into Donor-Advised Funds or corporate foundations to preserve the tax benefit now while continuing to make grants over time. Others are taking a harder look at their entire giving strategy and starting fresh.

What’s clear is that nonprofits are navigating more uncertainty than they have in a long time. Policy shifts, funding changes and rising costs are hard to predict. The organizations that hold up best won’t necessarily be the largest or best funded. They’ll be the ones with a clear read on the landscape, a compelling story for corporate partners and the willingness to ask honest questions about their own future.

That last part is harder than it sounds. But it’s where the work starts.

A few things nonprofits can do now:

• Audit your corporate relationships. Know which partners are likely affected by the 1% floor and start those conversations early before dollars quietly get redirected elsewhere.
• Update how you talk about your work. A case for support that reads like a grant proposal won’t land with a marketing audience. Think reach, visibility and business investment alongside mission impact.
• Get ahead of consolidation conversations. If your board is asking hard questions about sustainability, don’t wait for a crisis. The feasibility process goes better when it’s proactive and so does the communication around it. Donor messaging, staff communication and community trust are often what determines whether a merger strengthens or damages an organization.
• Don’t go at it alone on the communications piece. Whether you’re entering a cause-marketing partnership or navigating an organizational transition, getting the narrative right for donors, staff and the public take the same discipline as any high-stakes stakeholder situation.

If you’re working through any of these challenges, whether you’re a corporate foundation rethinking your strategy or a nonprofit navigating what comes next, we’re here to be a resource. GroundFloor Media partners with corporate foundations, nonprofits and philanthropic organizations on strategy, stakeholder communications and organizational change.