Part 2: What Non-Profit Leaders Need to Know as Congress Returns

By Michael Giovanis, Strategist, Fundraising Sol

Where We Left Off

The One Big Beautiful Bill Act (OBBBA) introduced major tax reforms affecting nonprofits:

• Preserves a universal charitable deduction for non-itemizers.

• Adds a 0.5% floor for itemized charitable deductions (2026+).

• Enforces a 1% minimum on corporate giving for tax deduction eligibility.

• Expands excise taxes on executive compensation and endowment income.

• Preserves a universal charitable deduction for non-itemizers, allowing smaller donors to deduct up to $1,000 for individuals and $2,000 for couples each year.

For fundraising, these changes mean:

• Smaller donors may now see more value in giving consistently, since they can claim a modest but universal deduction.

• Larger donors may want to accelerate giving in 2025—before the 0.5% AGI floor kicks in—to maximize tax benefits.

• Planned giving and bunching strategies could become more common, as major donors choose to concentrate gifts in certain years to exceed the deduction floor.

For nonprofits running capital campaigns, this is a crucial moment to frame asks around timing. 2025 could be a particularly strong year to encourage large commitments, while the universal deduction may energize broad-based grassroots giving in the years ahead.

The New Rule Nonprofits Can't Ignore

The 1% corporate giving floor goes into effect with the 2026 Tax Year.

After OBBBA, there's now a 1% floor and a 10% ceiling—only contributions between those limits are immediately deductible.

Contributions below the 1% floor and excess amounts above the 10% ceiling can still be carried forward for up to five years. This means while some contributions may not qualify immediately for a deduction, those funds aren’t lost—they’re postponed and can become deductible in future years, as long as IRS limits are respected.

Example: if a business makes $10 million, the first $100,000 in giving doesn’t count for a deduction that year—only dollars above that do.

Takeaway: Corporations may consolidate giving into fewer, larger gifts. This is the time to pitch multi-year partnerships or match campaigns that clear that floor.

Also, remember that gifts structured as business expenses—such as corporate sponsorships or naming opportunities that provide marketing and brand visibility—are fully deductible.

As companies rethink how they categorize their philanthropic support, expect increased interest in sponsorships and awareness-building opportunities. For capital campaigns, that may mean stronger appetite for naming rights and other visibility-driven commitments.

Corporate Giving Shift Prep

1) Prioritize fewer, bigger asks. Companies will likely consolidate giving—so move beyond small sponsorships and aim for significant, strategic commitments.

2) Pitch multi-year partnerships. Secure longer agreements that help companies cross the 1% threshold—either in 1 year or over the course of multiple years—while giving your programs stability.

3) Use match campaigns. Position challenge or matching grants as a way for companies to maximize visibility while meeting their giving floor.

4) Frame it clearly. Explain the change clearly in plain language.

Start now. Build these conversations into fall and year-end asks so you’re ahead of the 2026 shift.

How to Talk to Your Board, Staff, and Donors

Your board, staff, and donors all want clarity about your plan. Keep the message consistent but tailored to each audience:

• Board: “New tax rules will soon require corporations to give more before they qualify for a deduction. The board and leadership will need to work together to update our strategy for securing sustained or increased support.”

  
  

• Donors: “Private gifts are what keep our programs running on time while Washington debates. And here’s our plan A, B, and C—so you know exactly how your gift keeps us steady.”

  
  

• Staff: “Each plan spells out what it means for our day-to-day work, so there won’t be surprises.”

Taken together with the funding outlook we shared in Part 1 of this mini-series, these tax and corporate shifts remind us that while we can’t control Washington, we can control how ready we are to adapt.

This is Part 2 of a two-part series. If you missed Part 1, you can read it here.

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Michael provides policy and advocacy expertise at Fundraising Sol, helping clients navigate funding landscapes and legislative initiatives. He is also the principal consultant of Availing Echoism, offering fractional operations, finance, HR, and development services to nonprofits. He loves jazz music and camping with his dog.