New Tax Changes Will Impact Year-End Giving and How to Plan!

Exciting news for supporters of your mission! Beginning in 2026, new tax laws will affect how individuals and corporations can deduct their charitable donations. These changes could provide a significant incentive for 2025 year-end giving.

The One Big Beautiful Bill (OBBB) introduces three new tax provisions that could significantly influence decisions on charitable giving strategies, offering both expanded opportunities and important considerations for donors.

These provisions were introduced to simplify the tax code and encourage broader participation in charitable giving. By setting minimum thresholds and adjusting deduction rates, lawmakers sought to balance federal revenue needs with meaningful incentives for philanthropy. For individuals, the adjustments aim to motivate both itemizers and non-itemizers to give, while the new corporate giving floor is designed to ensure businesses contribute consistently to community causes.

What This Means for Individual Donors

For Itemizers: For those in the top tax bracket and who itemize their taxes, the new legislation caps the tax benefits of itemized charitable deductions at 35%, even for those in the 37% marginal tax bracket.

What has changed: Beginning in 2026, there will be a new floor on charitable contributions, as well as a new reduction in tax benefits for taxpayers in the top income tax bracket:

• Minimum threshold: Taxpayers will only receive tax benefits for charitable giving that exceeds 0.5% of their adjusted gross income. For example, if a donor’s Adjusted Gross Income (AGI) is $200,000, they can only deduct giving in excess of $1,000.

• Benefit reduction: The deduction rate for those in the top income bracket drops from $0.37 to $0.35 per dollar donated, capping the tax benefit at 35%. This means taxpayers in this bracket will receive a $350 deduction for every $1,000 donated instead of the previous $370. Note: the current rule allowing a full deduction for individuals taxed at the 37% rate still applies for 2025.

What to consider: Many high-net worth individuals will donate in 2025 to avoid the downsides of the new law. Gifts to donor advised funds count toward the minimum threshold for charitable deductions, so those who are able may want to “bunch” multiple years of giving into a single tax year. Bunching can help exceed the 0.5% threshold and maximize the tax benefit, while still allowing donors to support nonprofits with grants from their fund over time. 

For Non-Itemizers: In a major change, non-itemizing taxpayers will be able to claim a deduction for cash donations. Single filers can deduct up to $1,000, while married couples filing jointly can deduct up to $2,000. This is great news for the approximately 90% of taxpayers who don't itemize, as it provides a new incentive to give. This could be a huge boost for individual donors and membership groups next year.

A New Floor for Corporate Giving

What has changed: Beginning in 2026, there will be a new floor on charitable contributions for corporate donations, requiring corporations to contribute at least 1% of their taxable income to qualify for a charitable tax deduction. Only donations above the 1% floor will be deductible.  

Why it matters: If a company’s charitable giving does not meet this threshold, it will not receive the tax benefits of past years.

What to consider: Corporations may donate at the end of this year to avoid this tax provision. “Bunching” gifts in a single year, then granting out over time, is a strategy to consider for maximizing the tax benefits of a corporate giving program. 

What This Means for Your Year-End Giving

With these new rules on the horizon, the end of this year is an ideal time for high-income donors and corporations to give. This makes a strong year-end giving campaign even more critical for reaching these key supporters.

Your Year-End Giving Game Plan

With these tax incentives in mind and December fast approaching, a crucial window opens for nonprofits. The year-end giving campaign, which typically runs from October through December, is the most important fundraising period of the year. This is when nonprofits can acquire new donors, strengthen relationships with current supporters, and meet their annual revenue goals.

A successful year-end campaign requires a strategic approach. Here is a timeline to help you get started:

Key Steps to a Successful Campaign

1. Set SMART Goals

Your goals should be Specific, Measurable, Achievable, Relevant, and Time-bound. Instead of saying "raise more money," set a clear goal like, "Raise $25,000 in donations between GivingTuesday and December 31, with 20% of gifts from new donors."

This gives your team a target and allows you to measure success. When setting your goals, work with your board members and use data from past campaigns to guide your decisions.

2. Segment Your Donors

Don't use a one-size-fits-all approach. Every donor is different, so segment your list based on giving history, engagement, or gift size. For example, a first-time donor will need a different message than a long-time supporter or a major gift donor. A tailored approach will increase response rates and deepen relationships. Specifically for major gift donors and corporate sponsors close with the tax incentive to motivate them to give by the end of December.

3. Design a Multichannel Communications Strategy

Leverage multiple channels to reach a diverse audience. A robust strategy often includes:

• Direct Mail: Ideal for sending heartfelt appeals.

• Website: Promote online giving and inform donors about your mission.

• Social Media: Host peer-to-peer fundraisers and reach new audiences.

• Email: Essential for regular updates and digital appeals.

Across all channels, tell powerful stories about how a donor's contribution makes a difference.

4. Craft Compelling Appeals

Your year-end appeal is your core message. Whether through a letter, email, or social media post, make sure it’s personal and impactful. Effective appeals include:

• A personalized greeting

• An honest and warm tone

• A clear demonstration of your nonprofit's impact

• Gratitude for the donor's past support

• A clear call to action

  • For those individuals and companies that will be impacted by the 2026 tax law, encourage them to “bunch” or give one gift for multiple years this year.

• Multiple ways to give, including options for corporate gift matching and donor advised funds

5. Acknowledge Your Donors

The key is to be sincere, highlight their role in your mission, and make them feel appreciated for their contribution.  In addition to an official acknowledgement, go the extra mile with one of these options:

• Send personal thank you notes from board members, key volunteers, or senior staff

• Send an email or video that mentions their specific gift and its impact

• Make phone calls

By following these steps, you'll be well on your way to a successful year-end giving season.

As year-end approaches, now is the time to position your nonprofit for success. With new tax laws taking effect in 2026, donors and corporations have powerful incentives to give before December 31. Don’t leave potential contributions on the table—let us help you design a year-end campaign that inspires generosity and maximizes results. 

👉 Contact CSR today to get expert support for your year-end giving strategy.

About the Author

Laura Rheintgen is a Client Manager with CSR, where she partners with nonprofits to strengthen their fundraising, communications, and organizational strategies. With a background in development and program leadership, she brings a keen eye for donor engagement and a passion for helping organizations translate vision into measurable impact.