The passage of the 2025 Reconciliation Act (or One Big Beautiful Bill Act) in July brought forth a number of changes to charitable giving rules, which will take effect in 2026 and 2027. Accordingly, it behooves leaders of nonprofit organizations to start planning on how these changes will impact their organizations in general and fundraising in particular.

According to a recent report from Arts, Culture, and Media Philanthropic Advisors titled One Big Beautiful Bill Act and Charitable Giving in 2026: Guidance for Fundraisers, here are the key changes that will impact nonprofit organizations:

Expanded Charitable Deduction for Non-Itemizers. Beginning in 2026, individuals who do not itemize on their federal tax returns will now be eligible for a charitable deduction on cash donations to charities of up to $1,000 for individuals and $2,000 for joint filers. Gifts made to donor advised funds and private foundations are not eligible for this deduction, and these amounts are not indexed for inflation.
Permanent 60 Percent Limit for Individual Cash Contributions. The bill makes permanent previously passed legislation, which increased the deduction limit for cash contributions made by individuals to nonprofit, qualifying organizations from 50 percent to 60 percent of an individual’s adjusted gross income.
0.5 Percent Adjusted Gross Income Floor for Itemizers. Itemizing taxpayers are now only able to deduct donations exceeding 0.5 percent of their adjusted gross income beginning in 2026. In addition, itemizers in the top tax bracket (37 percent) will receive a reduced benefit of only 35 cents of each dollar donated. In other words, a taxpayer in the 37 percent tax bracket that contributes $1,000 to a nonprofit will receive a $350 deduction rather than the current $370.
New Tax Credit for Contributions to Scholarship Granting Organizations. Beginning in 2027, a new tax credit of up to $1,700 will be available for taxpayers who make contributions to private or religious primary and secondary schools for the purpose of funding scholarships for eligible students regardless of whether they itemize deductions.
1 Percent Floor for Corporate Donations. Corporations may now only deduct charitable contributions that exceed 1 percent of their taxable income up to a ceiling of 10 percent.

Arts, Culture, and Media Philanthropic Advisors offer the following recommendations for nonprofit leaders in fundraising for their organizations:

Engage Everyday Donors Through the New Deduction and Scholarship Tax Credit. Organizations should highlight how modest gifts qualify for this benefit and design fundraising campaigns that appeal to non-itemizing taxpayers. And, in instances where scholarship-granting organizations qualify, potential donors can be encouraged to take advantage of the $1,700 scholarship tax credit starting in 2027.
Help Itemizers Plan Around the Floor and Cap. New restrictions on itemizing taxpayers may stimulate “bunching” strategies (timing larger gifts every few years rather than yearly) and create more opportunities for strategic donation planning. The Act also increases the estate and gift tax exemption to $15 million for individuals and $30 million for joint filers, so nonprofits can take advantage of smarter planned giving strategies.
Support Corporate Partnership Strategically. Because corporate donors must now commit at least 1 percent of their taxable income to qualify for charitable deductions, nonprofits should encourage multi-year sponsorships or pooled campaigns that help companies exceed that threshold.

“The One Big Beautiful Bill Act presents both opportunities and challenges for nonprofits,” said Peter Hansen, Principal of Arts, Culture, and Media Philanthropic Advisors in an email message to this writer. “By restoring a universal charitable deduction, it can boost small donor giving, but new limits on deductions for major and corporate donors may temper large gifts. Nonprofits will need to engage donors strategically – encouraging multi-year or ‘bunched’ giving – to turn this legislation into a moment of empowerment.”