Communicating with donors and soliciting contributions under the One Big Beautiful Bill Act of 2025

The One Big Beautiful Bill Act (OBBBA) significantly reshapes the charitable giving landscape beginning in 2026 by altering the tax incentives that influence donor behavior. While overall charitable giving is projected to decline slightly (approximately 1%), the number of participating donors is expected to increase, creating a more segmented and planning-driven environment for not-for-profits.

Key policy changes

OBBBA introduces several structural changes to charitable deductions:

• Non-itemizers can now deduct up to $1,000 (single) or $2,000 (joint), expanding access to tax benefits.
• Itemizers face a new 0.5% AGI floor, reducing the deductibility of smaller gifts.
• High-income taxpayers see reduced value from deductions due to a 35% cap.
• Corporations can only deduct contributions exceeding 1% of taxable income, lowering incentives for smaller corporate gifts.

These changes effectively lower the “value” of giving for many high-dollar donors while encouraging broader participation among smaller donors.

Shifts in donor behavior

The law is expected to produce divergent behaviors across donor segments:

• Broad-base donors: More likely to give smaller amounts due to new universal deductions.
• Mid-level donors: Increasingly sensitive to timing, often “bunching” donations into certain tax years.
• High-net-worth donors: More reliant on advanced strategies such as appreciated assets, donor-advised funds (DAFs) and advisor-led planning.

Additionally, giving is expected to become more concentrated toward year-end, as donors wait for clarity on income and tax positions before finalizing contributions.

Strategic implications for not-for-profits

To adapt, organizations must adopt a more segmented and proactive approach:

• Broaden the donor base with simple, accessible giving options (e.g., recurring gifts).
• Engage mid-level donors through multi-year planning conversations around timing and tax efficiency.
• Enhance major gift strategies by facilitating complex giving vehicles and coordinating with advisors.
• Rethink corporate fundraising toward larger, strategic partnerships rather than smaller transactional gifts.

Messaging and compliance

Effective communication should remain mission-first, with tax considerations presented as a secondary benefit. Clear, plain-language messaging builds trust, while overly technical or advisory language should be avoided.

Organizations must also maintain strict compliance, including:

• Avoiding personalized tax advice
• Using appropriate disclaimers
• Providing proper written acknowledgments for donations

Operational and planning priorities

Success under OBBBA requires aligning operations with new donor behaviors:

• Begin donor education early in the year
• Execute targeted, segmented campaigns at year-end
• Use CRM systems to track donor timing strategies (e.g., bunching, off-years)
• Strengthen internal processes for complex gifts and receipting