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.