Tax Policy Is Changing—Here’s How to Talk to Your Donors

Slow and Steady Wins the Race:

A Nonprofit’s Guide to Navigating the New Tax Policy with Donors

By Ginny Reynolds-Badgett

Consultant

In Aesop’s timeless fable The Tortoise and the Hare, the steady and focused tortoise overtakes the boastful, erratic hare. The tortoise’s persistence pays off in the long run.

Today’s nonprofits face what may feel like similarly uphill terrain: the passage of H.R.  1 (“One Big Beautiful Bill”), shifting tax rules, and economic volatility can make every fundraising step feel uncertain.

Instead of reacting impulsively or panicking, organizations that ground themselves in consistent, proven best practices—while thoughtfully adapting to policy shifts—will be best equipped for success. Just like the tortoise, slow, intentional progress can lead to victory.

What’s In H.R. 1? Key Tax Policy Shifts

H.R. 1 enacted in early July 2025, includes significant tax-related changes that have the potential to impact nonprofits and their donors. Here are the top three you should know:

• New Universal Charitable Deduction for Non-Itemizers
  Non-itemizing taxpayers (in recent years, over 90% of filers) can deduct up to $1,000 for individuals or $2,000 for joint filers in charitable contributions. This is anticipated to have a positive impact on philanthropy by broadening the incentive to give, especially among smaller donors. (The Curtis Group is a member of the Charitable Giving Coalition; CGC’s Chair, Brian Flahaven, was a guest blog contributor earlier this year.)
• 2) 0.5% Floor & Cap on Itemized Deductions for Individuals
  High-income individuals will face limits: only donations above 0.5% of Adjusted Gross Income (AGI) qualify for deduction, and their itemized deduction value is capped at roughly 35%—down from 37%. Both the 0.5% Floor and Cap on itemized deduction value may lead to a decline in giving, especially among major individual donors.
• 1% Floor for Corporate Charitable Contributions
  Corporations must now give at least 1% of taxable income for their donations to be tax-deductible. This provision may prompt smaller or less profitable corporations to decrease, pause or bunch their giving.

Some of these changes may incentivize giving, while others may have the opposite effect. Unfortunately, it may be several years before we have a full understanding of the true impacts of these shifts in tax policy.

Best Practices That Build Momentum Through Change

The good news: these policy shifts create an opportunity for nonprofits to begin (or continue) a dialogue about their giving. The three changes outlined above will not take effect until tax year 2026 – so now is the time to start discussing potential impacts with your donors.

Talk to your donors about the new tax bill and how it’s affecting their giving; the information you gather will be essential to moving forward thoughtfully and strategically, one step at a time.

Begin building awareness of these changes and internally planning for any potential impacts on your fundraising. Your strategy and approach will vary depending on the type of donor and their unique circumstances. All donors should always consult with their tax professional, accountant or financial advisor most knowledgeable about their situation.

Asking the right questions can spark dialogue, deepen donor engagement and help your nonprofit plan for the future.

• Encourage non-itemizers to explore the new tax benefits that may be available to them:
  • What inspires you to give, and how do you measure the impact of your generosity?
  • What are your top three giving priorities? Have they changed in 2025 (or from last year)?
  • There has been a lot in the news recently about how H.R. 1 may impact giving to nonprofits. Do tax benefits or incentives impact your giving? Are you familiar with the Universal Charitable Deduction?

• Engage major donors most likely to be impacted by 0.5% floor and cap on itemized deductions in thoughtful dialogue around their giving strategies:
  • How have the recent changes in the tax code affected how you think about your charitable giving this year?
  • Have you discussed with your advisor how the0.5% deduction floor might impact your philanthropy?
  • Do you foresee changes in the timing or structure of your gifts because of the new cap on itemized deductions?

• Assess corporate donors’ approach to corporate social responsibility budgets in light of recent changes:
  • How are the recent tax changes influencing your corporate giving strategy or philanthropic priorities?
  • Are you considering different giving formats—like sponsorships, in-kind donations, or program-specific investments?
  • How can we help demonstrate the ROI of your philanthropic investments under the new tax framework?

As the philanthropic landscape continues to shift, curiosity is key. Rather than assuming defeat, as the tortoise in Aesop’s fable might have done, start asking questions. The information you gather from your donors will be essential to moving forward thoughtfully and strategically, one step at a time. While H.R. 1 changes tax policy around giving, strategic, relationship-based fundraising will remain your most powerful tool.

Additional Resources

Curious to learn more about the tax bill and its implications for charitable giving? Here are some additional great resources that our team has been using to understand the H.R. 1 and build our recommendations moving forward.

“Charitable Giving Coalition Strongly Supports Senate Making Charitable Giving Permanent and Available for All Americans,” Charitable Giving Coalition

“Analysis of the 2025 Tax Bill and It’s Impact on Charitable Nonprofits,” National Council of Nonprofits

“Tax reform & charitable giving: What it means for your organization and donors,” The Nonprofit Alliance

“Get Ready for New Rules on Tax Breaks for Charitable Giving,” by Laura Saunders, The Wall Street Journal

“How the 2025 Charitable Tax Law Changes Boost the Value of Bunching and DAFs,” by Russell James, J.D., Ph.D., CFP