The new year brings updated tax deduction rules for individuals making charitable gifts in 2026. How should your nonprofit’s fundraising program be prepared to respond to both your organization’s and donors’ needs.
First, consider your donor segments. Small to mid-size donors may see more of a tax benefit in their annual gifts than corporate and major donors to your organization in the new year. This signals a greater need to diversify your fundraising activities for different audiences contributing at various levels.
Here are a few fundraising activities or enhancements to bring into your development program this year to help your supporters gain the greatest benefit and impact.
Your annual fund activities should look to further engage your small to mid-level donors. Monthly giving programs or sustainable fundraising activities provides an opportunity for supporters to engage with your organization while helping middle income donors receive an additional benefit on their taxes.
Here’s how. According to the IRS, 87% of taxpayers take a standard deduction and do not receive a tax benefit for donating to charitable organizations. In 2026, single tax filers who do not itemize their taxes will be able to deduct up to $1,000 in charitable gifts, while married taxpayers filing jointly will be able to deduct $2,000 annually. Previously, donors could only deduct their charitable contributions if they itemized their taxes.
Monthly giving programs can encourage middle income donors to increase their annual support to your organization if they are able to realize the tax incentives. For example, an individual who contributes to your nonprofit annually at $500, may consider a monthly gift of $100 or $1,200 over the course of a year. In each case, both the donor and nonprofit benefit from the sustaining gift, with the benefactor realizing the tax incentive and organization yielding a larger contribution.
Annual fundraising events are also an area where nonprofits could engage more small to mid-size donors. Often, events such as walks and galas are ticketed or require a registration fee to participate. Fundraising through special events tend to engage larger audience participation to support a cause at small to mid-level gifts. Some fundraising events also engage others through peer-to-peer fundraising in which cash gifts could be deductible by the contributor.
While contributing to a nonprofit through a sustaining giving program or special event may have tax benefits for small to mid-level donors, higher income benefactors do not receive the same advantages.
Individuals with high net income are more likely to itemize their taxes. In 2026, taxpayers who itemize their income taxes will not be able to deduct charitable donations until after 0.5% of their adjusted gross income (AGI). For example, a tax filer earning $300,000 will not be able to deduct the first 0.5% or $1,500 in contributions made to a nonprofit organization.
In addition, the tax deductions only apply to cash gifts made to a charitable organization and not a donor-advised fund or private foundation. This may discourage major donors from making small contributions while waiting longer to make a larger gift. This strategy is often referred as “bunching” charitable giving.
In addition, taxpayers in the highest income tax bracket (37%) will see a reduction in their tax benefit for charitable giving as the rate will be capped at 35%.
A major gift strategy may be considered to continue engaging donors who can make a larger charitable contribution to your organization in which smaller donations may be less appealing under the new tax laws. Nonprofits should look ahead three to five years and identify major gift opportunities that high earning benefactors could consider.
Cultivating major gifts may take longer; in which case, presenting a clear proposal with your needs over a multi-year period may encourage major donors to support your nonprofit in a way that benefits both parties.
Nonprofits will also need to re-examine how they are engaging with the corporate community. Corporate contributions will have its changes too this year. An income tax floor of 1% is required before a company can begin to deduct gifts to charitable organizations. This may lead to corporations declining to make small charitable gifts or sponsor events at a lower level.
In addition, corporations may look to support fewer organizations with a larger gift amount to make a greater community impact. With that in mind, nonprofits should look to present more comprehensive proposals over a year or more for corporate support rather than small gift or sponsorship requests.
The change in corporate giving allows for the opportunity for nonprofits to engage more with a company’s employees through matching gifts, volunteer programs or peer-to-peer fundraising events.
At the turn of this calendar year, most donors are not going to know how the new tax rules are going to impact charitable giving. Nonprofits should be prepared to communicate the new benefits of charitable giving in their donor communications, fundraising marketing materials and sharing stories of donors’ impact.
Navigating and communicating these tax incentives to donors can be complicated, but Amperage Marketing + Fundraising can help. Amperage’s professional advisers can help develop a fundraising strategy, write content and design marketing materials to promote your organization’s ability to engage donors for a greater impact. Contact us at https://amperagemarketing.com/contact/ to learn more about our services.
Author Melissa Pence, CFRE, is a fundraising adviser for Amperage Marketing + Fundraising. She has worked in fundraising and development in the nonprofit sector for more than two decades.
