What the One Big Beautiful Bill Act Means for Charitable Giving — and What Nonprofits Should Do Now

The One Big Beautiful Bill Act became law on July 4, and buried in its language is a provision that could have real implications for how everyday Americans — and high-net-worth individuals — give to charity.

For the first time in years, Americans who do not itemize will be able to deduct charitable contributions: up to $1,000 for individuals and $2,000 for married couples. Prior to this change, unless your total deductions exceeded the standard deduction threshold — somewhere in the mid-$20,000s for couples — your charitable gift wasn’t tax deductible.

This is a meaningful shift when you consider that the majority of donors, in terms of raw numbers, are non-itemizers. In my view, this change, which goes into effect for the 2026 tax year, is less about incentivizing new giving and more about bringing existing giving back into the fold of formal philanthropy. Last year’s hand-wringing over a donor dropoff missed the mark: People didn’t stop giving, they just gave differently — through GoFundMe, Facebook fundraisers and other platforms where a tax receipt was an afterthought, if one existed at all. This bill, in part, is about regaining visibility into those dollars and behaviors.

At the other end of the giving spectrum, the bill introduces a 35% cap on charitable deductions for those in the top tax bracket, starting with the 2026 tax year. This might seem minor, but for fundraisers who work in major and principal gifts, it’s a material change. These are the donors who, guided by their tax advisers, often made large year-end gifts not necessarily because of deep personal alignment, but because a financial professional said, “You may want to move $500,000 to charity this year.” When those gifts showed up, we thanked the donor warmly — and often assumed they were more intentional than they really were.

In many ways, this cap may reduce the frequency of these over-the-fence gifts. That puts added pressure on organizations to engage high-net-worth individuals more deliberately and to strengthen their value proposition.

So what should nonprofits be doing right now?

1. Re-engage Your Small-Dollar Donors

Make sure they know about the new deduction. It’s not flashy, but it’s real. Consider incorporating it into your year-end appeal or spring campaigns. Framing a $1,000 gift as a new “tax-smart giving level” could encourage some donors to stretch beyond what they’ve given before.

2. Update Your Acknowledgment Language

Make it clear — in receipts, email confirmations and follow-up messaging — that these gifts are now deductible even if the donor doesn’t itemize. This is a small but important signal of trust and transparency.

3. Make It Easy to Give — and Track

Impulse giving isn’t going anywhere. But now, you have a chance to move that behavior back into formal philanthropy. Use platforms that generate instant receipts. Offer donor portals that allow people to retrieve their history. Make tax season easier for them.

4. Double Down on Major Gift Cultivation

The 35% cap means fewer large gifts will be pushed out the door for purely tax-based reasons. That means more gifts will come only after relationship-building and shared vision. This is not the year to coast on last year’s list.

5. Steward Like It Matters — Because It Does

With tax benefits changing, the donor’s sense of impact and connection becomes even more important. The thank-you note isn’t just a formality anymore — it might be what determines whether they give again.

We’re entering a new chapter in donor behavior — one that blends emotional motivation with shifting tax policy. Nonprofits that embrace both sides of that equation will be the ones best positioned to thrive.

The preceding content was provided by a contributor unaffiliated with NonProfit PRO. The views expressed within may not directly reflect the thoughts or opinions of the staff of NonProfit PRO.