Federal Budget / Tax Policy
Forefront advocates for federal protection of, and investment in, the nonprofit sector and the communities we serve through the Congressional budget process. This includes both spending and tax policy. Federal tax and budget policy impacts the State of Illinois’ budget for two reasons. First, Illinois’ income tax collections are derived from federal adjusted gross income (AGI). So, if the federal government cuts taxes, which shrinks the AGI of many filers, the state will automatically be taxing fewer dollars, unless it proactively decouples from the federal changes. Second, if the federal government cuts programs that the State prioritizes, the state will need to find revenue to backfill those cuts, and/or make difficult decisions about eliminating key programs.
In 2025, Congress negotiated major tax legislation (H.R.1; see Forefront’s summary analysis). Leading up to the enactment of H.R.1, Forefront was heavily involved in related advocacy for years, and is now working with partners to help inform stakeholders about its impact and any ensuing policy response. Forefront generally opposed H.R.1, but there was one huge win: the bill restored a non-itemizer charitable tax deduction, which supports the nonprofit sector’s workforce and provides an irreplaceable source of unrestricted capital and general operating support. Prior to H.R.1, this provision was included in The Charitable Act (H.R.801 / S.317), which was supported by the Charitable Giving Coalition, National Council of Nonprofits, Independent Sector, Council on Foundations, and United Philanthropy Forum (see Fact Sheet).
Other Legislation
- Retirement Benefits for the Nonprofit Workforce: People shouldn’t have to choose between working at a mission-focused organization and securing their own retirement. Both the House and Senate recently reintroduced bipartisan legislation (H.R. 4548/S. 2365) that would provide tax incentives for nonprofits to establish retirement plans for their employees. Tell your legislators to cosponsor the Small Nonprofit Retirement Security Act.
- Tax Fairness for Nonprofit Employers: Nonprofits employ 11% of the private sector workforce in Illinois. Yet, many tax credits and tax deductions made available to private sector employers through income tax filings are unavailable to nonprofit employers, because nonprofit employers do not pay income tax. (Examples include childcare, work opportunity, paid family and medical leave, Indian employment, pension start up, and disabled access tax credits.) Nonprofit employers do, however, pay payroll taxes. By creating similar benefits through payroll taxes, nonprofit employers would be treated more fairly. Read more details in the summary papers from National Council of Nonprofits and Independent Sector.
- Workforce Development Through Charitable Loan Repayment: Charitable loan repayment should receive the same tax treatment as traditional scholarships. “Post-graduation scholarship grants” are currently subject to income tax, whereas charitable scholarships are not. In both cases, funds are used to pay or repay the same type of expenses: tuition, books, and other fees related to higher education. In this proposal, post-graduation scholarships would be classified as a charitable activity and excluded from an individual’s federally taxable income. The concept is supported by the Council on Foundations and the Alliance of Illinois Community Foundations. Download a Fact Sheet (from 118th Congress; will be updated).
- Volunteer Mileage Rate: Each year, the IRS is permitted to make adjustments to the federal business mileage rate. In contrast, the IRS rate for volunteer mileage (i.e., for volunteers who drive their vehicles on behalf of charitable nonprofits to transport property or individuals) is fixed in statute at 14 cents/mile and has not been adjusted for over 25 years. Under this proposal, the charitable mileage rate would be equalized with the business rate. This proposal is supported by Independent Sector, National Association of Towns and Townships, National Council of Nonprofits, plus this initial list of organizations (this is expected to grow). See news release from the sponsor during the 118th Congress. Download a Fact Sheet (from 118th Congress; will be updated).
Voting Rights
Forefront joins its national partners in supporting legislation that expands and protects the right to vote and the protections for democratic elections in our country. We envision a society in which all people have representation, and we believe that a healthy social impact sector is fundamental to a healthy democracy. We support civic engagement, voting rights, open elections, accountable and ethical government, a full Census count, greater connectivity, and civil dialogue. To this end, we supported the John Lewis Voting Rights Advancement Act (HR 4 and HR 5746 in the 117th Congress), and will continue to support similar legislation if reintroduced in the future. We remain deeply concerned about attempts to curtail voting rights and will vigorously oppose any attempt to repeal the Voting Rights Act of 1965.
Census 2030
Forefront is committed to supporting full participation in the decennial Census. 2030 Census planning is actively underway. We continue meeting regularly with US Census Bureau staff and key partners from our statewide effort in 2020. In recent years, Forefront joined other stakeholders across the US in recommending specific improvements to the standards for federal data on race and ethnicity, and we submitted comments to the Census Bureau’s Federal Register Notice on how to improve for 2030.
Looking Back at 2020
Looking Ahead to 2030