Essential Information for Nonprofits to Share with Their Donors Before December 31, 2025
Recent federal changes affecting charitable giving (The One Big Beautiful Bill Act, signed into law on July 4, 2025) are reshaping how donors at all income levels may participate in philanthropy. While nonprofits often view tax changes through the lens of potential revenue loss or gain, these updates also create strategic opportunity: A chance to sharpen messaging, diversify engagement, and re-energize donor relationships. As The Phoenix Philanthropy Group often reminds clients, the legislation itself is not the differentiator—how nonprofits prepare to respond is.
Phoenix Philanthropy president and founder Richard Tollefson explains, “Every change in the philanthropic landscape—regulatory, economic, demographic, or cultural—presents a critical decision point. Organizations can either wait and react, or they can anticipate, communicate, and adapt with intention. The latter is where real fundraising strength is born.”
The new legislation introduces several benefits and limitations that may influence giving behavior.
- Deduction for Non-Itemizers: Beginning in 2026, taxpayers who take the standard deduction may claim an above-the-line deduction for cash gifts: up to $1,000 for individuals or $2,000 for married couples filing jointly.
- Itemizer Threshold: Itemizing taxpayers may now deduct only the portion of charitable gifts that exceed 0.5% of their Adjusted Gross Income. A donor earning $200,000, for example, must give more than $1,000 to receive any deduction.
- Reduced Benefit for High-Earners: The effective value of charitable deductions for top earners drops slightly, from 37 cents to 35 cents on the dollar.
- Corporate Giving Rules: Corporations may deduct contributions only after they exceed 1% of taxable income, up to the existing 10% limit.
These changes may expand participation from everyday donors while modestly reducing incentives for some higher-income donors and corporations. Still, most giving is rooted in mission and personal values—tax incentives simply shape how and when donors give.
What This Could Mean for Nonprofits
- A larger potential donor base.
By offering tax benefits to non-itemizers, the legislation may encourage many middle-income households to start or resume charitable giving. Organizations with broad community appeal—such as social-service agencies, faith communities, and mission-driven nonprofits—may see the greatest lift. - Shifts in timing and structure of major gifts.
High-income donors may work more closely with advisors to optimize giving strategies, including donor-advised funds, charitable trusts, or qualified charitable distributions (QCDs). This may influence when large gifts occur but also creates opportunities for deeper donor conversations. - Clear messaging and stewardship will matter more.
Donors will naturally wonder: How does this affect me? How can I give wisely? Will my gift still make a difference? Organizations that answer these questions clearly and positively will stand out. As Tollefson notes, “Organizations that thrive embed clarity, transparency, and gratitude into every donor interaction. Elevating donor purpose—above donor transaction—is where sustainable philanthropy lives.”
A Strategic Framework for Nonprofit Response
The Phoenix Philanthropy Group recommends a proactive approach grounded in six strategy pillars:
- Educate and empower your donors.
Offer simple, accurate explanations of giving options, and make it easy for supporters to find additional resources. Always remind donors to consult their own tax advisors or financial professionals for the most current, personalized guidance. Consider adding a “Tax-Smart Ways to Give” page to your website and updating it annually. - Strengthen monthly and mid-level giving.
Recurring donors provide stable, predictable revenue. Mid-level donors ($500–$5,000 annually) often respond strongly to personal stewardship, making them a high-potential segment for growth. - Emphasize impact storytelling and transparency.
Remind donors that their gift is not just deductible—it creates meaningful change. Share outcomes, personal stories, and updates frequently, not just at year-end. - Improve digital giving systems.
Ensure your online giving tools are fast, mobile-friendly, and trustworthy, with options for recurring gifts, employer matching, and alternative assets. - Collaborate with financial and professional advisors.
Host webinars or small-group conversations with estate planners, accountants, and financial advisors. This helps donors make informed decisions and reinforces your organization as a trusted resource. - Model multiple fundraising scenarios.
Develop conservative, moderate, and growth projections to anticipate revenue shifts and guide board decision-making.
Mindset Matters Most
Legislative shifts may influence donor behavior, but the most resilient organizations are those with strong stewardship practices, diversified donor bases, and clear communication about impact. A donor’s decision to give—and to give again—is ultimately driven by trust and emotional connection more than tax rules.
And as always, nonprofits should encourage donors to check with their tax advisors to ensure they have the most accurate and current information for their personal situation.
At Phoenix Philanthropy, we believe change is an opportunity. Organizations that invest in education, relationship-building, and transparent communication will not only navigate this transition but also discover new avenues for growth.
If you’d like help refining donor communications, updating strategy, or preparing your board and staff for these shifts, The Phoenix Philanthropy Group is ready to support you in turning uncertainty into opportunity.