The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, marks one of the most significant shifts to charitable giving rules in recent history. The new law affects how donors of all sizes approach their contributions, from small recurring givers to major philanthropists and corporate partners.

While tax policy changes often feel abstract, these updates carry very real implications for how nonprofits fundraise, steward relationships, and plan for the future. By understanding how different donor groups may respond, organizations can adapt with confidence and continue building a culture of generosity that thrives regardless of the tax landscape.

1. The universal deduction returns: A win for everyday donors

Beginning in 2026, taxpayers who take the standard deduction will once again receive a limited tax break for charitable donations—up to $1,000 for individuals or $2,000 for couples filing jointly.

For the first time in years, roughly 90% of taxpayers who don’t itemize their deductions will have a direct financial incentive to give.

What it means:

• This shift could re-energize small and mid-level giving.
• Donors who previously felt their gifts didn’t “count” financially now gain a tangible reason to contribute.
• Clear, inclusive messaging about this deduction can help first-time donors see their gifts as both impactful and financially smart.

How to respond:

• Educate supporters through year-end communications, newsletters, or campaign pages.
• Simplify messaging: “Your gift now qualifies for a tax deduction, even if you don’t itemize!”
• Reinforce the connection between everyday generosity and community impact, not compliance.

2. Major donors face a smaller deduction window

Under the new law, high-income donors will experience a modest reduction in their tax savings. The first 0.5% of income given will no longer be deductible, and the top marginal deduction rate drops slightly, from 37¢ to about 35¢ per donated dollar.

While the change may seem minor, for donors who give at scale—especially those considering multi-year commitments—it could influence timing, pledge structure, and giving vehicles.

What it means:

• Some donors may begin “bunching” multiple years of gifts into one tax year to optimize their deduction.
• Others might delay or restructure gifts through donor-advised funds or family foundations.

How to respond:

• Maintain transparent, collaborative communication with major donors.
• Provide clear information on long-term giving options such as pledges or planned gifts.
• Frame these discussions around values and impact first, not just tax advantages.

3. Corporate giving raises the bar

Corporations will soon need to contribute at least 1% of taxable income before their charitable gifts qualify for a deduction (up from no minimum previously).

This new rule rewards established corporate philanthropists and challenges companies that gave sporadically or below that threshold.

What it means:

• Businesses giving below 1% may scale back or consolidate giving to meet the new standard.
• Those already above the 1% floor may seek deeper, more strategic partnerships.

How to respond:

• Strengthen existing corporate relationships by showcasing measurable outcomes and community impact.
• Position partnerships as opportunities for long-term leadership and local visibility.
• Be prepared to demonstrate how your mission aligns with corporate social responsibility goals.

4. Planned and legacy giving stay strong

The OBBBA also doubles the estate tax exemption to $15 million per individual (or $30 million per couple). While this change only affects high-net-worth families, it reinforces the appeal of charitable bequests, donor-advised funds, and retirement-based giving.

What it means:

• Legacy conversations remain essential, even if fewer estates will face taxation.
• Donors are increasingly focused on leaving a lasting mark that transcends annual budgets.

How to respond:

• Continue building relationships with long-term supporters who see your mission as part of their legacy.
• Encourage planned gifts through wills, beneficiary designations, and charitable trusts.
• Offer educational sessions or resources on estate planning in partnership with trusted advisors.

5. State-level education credits add complexity

Starting in 2027, donors in participating states may qualify for a $1,700 federal tax credit for contributions to approved K–12 scholarship funds.

What it means:

• This incentive could redirect some education-related giving toward scholarship programs.
• Eligibility depends on whether each state chooses to participate, adding complexity for both donors and nonprofits.

How to respond:

• Stay informed about your state’s participation and communicate clearly with education-focused supporters.
• Build relationships with certified scholarship organizations to collaborate, not compete, for donor dollars.
• Reinforce that supporting your mission—whether directly or through partnerships—still creates meaningful, measurable impact.

Segmenting your donors for smarter outreach

As tax incentives diversify, personalized communication becomes even more valuable. Nonprofits that segment their audiences effectively will have a significant advantage in adapting to the OBBBA’s ripple effects.

Practical ways to segment:

• Group donors by giving behavior: recurring, annual, major, or legacy.
• Tag those motivated by specific issues (education, civic engagement, community aid, etc.).
• Use surveys or engagement data to identify why donors give, not just how much.

Tailored messaging examples:

• Everyday donors – “Your contribution now qualifies for a tax deduction, no itemizing required!”
• Major donors – “Let’s explore how your philanthropy can continue to make a difference under new rules.”
• Corporate partners – “Your company’s leadership sets the standard for community generosity.”
• Legacy donors – “Create a lasting impact that endures beyond this year’s giving season.”

The more you align messaging with motivation, the stronger your donor relationships will become.

Preparing your team for change

Adapting to new tax laws is a team effort.

Each role within your organization can play a part in preparing for 2026:

• Executive Directors – Provide regular updates to your board about how the changes could affect donor behavior and budget forecasting.
• Development Directors – Review your donor data to identify patterns and prepare outreach strategies for each donor segment.
• Gift officers and staff – Develop clear, mission-centered talking points about how your organization helps donors meet their personal and philanthropic goals.

This is also a great time to review gift acceptance policies, donation forms, stewardship letters, and acknowledgment templates to ensure your language reflects the new deduction landscape accurately and accessibly.

Turning change into opportunity

The charitable sector has always thrived on adaptability. While the OBBBA introduces new complexities, it also broadens participation in giving, opening the door for more people to feel that their generosity matters.

By blending insight with empathy, nonprofits can transform a tax policy shift into a renewed movement for inclusion and engagement.

Key takeaways:

• Keep messaging donor-centered, not tax-centered.
• Lead with clarity and confidence in your communications.
• Focus on building relationships that last beyond one fiscal year.

Change may be constant, but generosity endures—and nonprofits that prepare thoughtfully will find new opportunities to connect, inspire, and grow.

About the Author

Ally Orlando, Senior Copywriter at DonorPerfect
As a communications professional with a decade of experience, Ally helps fundraisers develop creative donor engagement techniques tailored to their mission