What a Recent Tax Law Change Means for Your Fundraising Right Now

You may not love talking about tax law.

Most fundraisers don’t.

When tax legislation comes up, it can feel complicated and far removed from the daily work of meeting with donors, running campaigns, and keeping everything moving.

But every so often, a policy change really does matter for your fundraising.

This is one of those moments.

A tax law that passed last summer is now in effect.
And it is already influencing how donors think about giving this year.

Not just major donors.
Every day supporters too.

So let’s walk through what’s happening in a clear and grounded way, without getting lost in tax jargon.

How the New Tax Law Affects Everyday Donors

This year, donors who take the standard deduction can once again receive a tax benefit for charitable giving.

That applies to roughly 90 percent of taxpayers.

Individuals can deduct up to $1,000.
Couples filing jointly can deduct up to $2,000.

What does this mean for your organization?

It means your consistent and loyal donors just received a small but meaningful affirmation that their generosity matters.

The supporter who gives $50 a month.
The family that sends a check each December.

This change does not create generosity.
But it does reinforce it.

If you have not yet shared this update with your donors, now is a good time to do so.

Keep the message light.
Keep it positive.
And always lead with impact.

The giving still comes from the heart.
The tax benefit is simply a helpful reminder.

What the Tax Changes Mean for Major Gift Donors

For leadership donors, the picture looks a little different.

Under the new law, the first half percent of income is no longer deductible.
The top deduction rate has also been slightly reduced.

This is not a reason for alarm.

We are not seeing donors pull away from the causes they care about.

What we are seeing is more thoughtful planning.

Some donors are asking questions about timing.
Some are considering multi-year gifts.
Some are exploring donor-advised funds or family foundations.

This is an opportunity for you.

Not to lead with tax strategy.
But to show that you are paying attention.

A phone call.
A note.
A conversation that says you are thinking about how their giving can be structured in ways that make sense for them.

That kind of care builds trust.

And trust always matters more than tax treatment.

Corporate Giving Under the New Tax Law

There is also a change affecting corporate donors.

Corporations must now give at least one percent of taxable income before charitable contributions qualify for a deduction.

For some companies, this may lead to fewer but more focused partnerships.

For others, it creates an opportunity to go deeper.

If you already work with corporate partners who exceed that threshold, they may be looking for ways to make their giving more strategic.

This is the time to clearly articulate your value.

Impact.
Community outcomes.
Employee engagement.
Brand visibility.

Strong corporate partners do not give only because of tax benefits.
They give because they want to make a difference.

What the Law Means for Legacy and Planned Giving

There is good news here.

The estate tax exemption has increased to $15 million per individual and $30 million per couple.
And it has been made permanent.

That removes uncertainty for families who are thinking long term.

But it does not change the heart of legacy giving.

People include nonprofits in their estate plans because they believe deeply in the mission.

They want their values to live on.

Continue having these conversations.
Continue offering education and partnership.
Continue leading with purpose.

This is relationship fundraising at its best.

A New Tax Credit to Watch for Education-Focused Organizations

Beginning in 2027, a new federal tax credit will be available for donations to approved K through 12 scholarship funds.

States will need to opt in.
Donors from anywhere in the country can participate once they do.

If your organization works in education, this is worth watching.

There is no need to panic or pivot prematurely.

Stay focused on what makes your mission distinct.
Strong relationships will continue to matter most.

Why Personal Communication Matters More Than Ever

With multiple tax changes in play, broad messaging becomes less effective.

Segmentation matters.

Every day, donors need reassurance.
Major donors want thoughtful conversations.
Corporate partners value clarity and outcomes.
Legacy donors want to talk about vision.

The more personal your communication, the stronger your relationships become.

One Important Reminder for Fundraisers

When policy changes make headlines, it can be tempting to chase new opportunities.

But your strongest prospects are often already in your database.

The donor who drifted away.
The supporter who has never been asked to do more.
The long-time champion who trusts you deeply.

As our colleague Gina Vaughn often reminds clients, your organization has the greatest opportunity with people who already believe in your mission and trust you to use their support wisely.

The Bottom Line

Tax laws will change.

Donor motivations remain remarkably steady.

People give because they care.
They give because they trust you.
They give because relationships matter.

This moment brings complexity.
But it also brings opportunity.

Lead with clarity.
Communicate with care.
Stay focused on relationships.

You are well-equipped for this work.

Need Some Strategic Guidance?

Whether you’re planning a campaign, building a major gifts program, or just want to talk through how these changes affect your organization, we’re here. Reach out and let’s have a real conversation about what’s next for your fundraising.

Interested in Focused Major Gifts Support?

The Major Gifts Intensive is a structured, multi-month program for fundraisers who want to strengthen their major gifts work with clear guidance and sustained support. If major gifts are a priority for your organization this year, we invite you to learn more and see if the program is a good fit.

Learn more about the Major Gifts Intensive