What the OBBB tax changes could mean for your advancement strategy

In July, Congress passed the “One Big Beautiful Bill,” which includes several updates to how charitable giving will be taxed starting in 2026. These changes are already raising questions for donors and could have a real impact on giving behavior in the year ahead.

I was talking with my husband, who’s a CPA, about the new rules and how they might affect advancement. I’m not a tax expert, but I’ve worked in this field long enough to know that even small shifts in policy can create ripple effects—especially when donors are confused or unprepared.

In this blog, I’ll break down what’s changing for individual donors, how it could impact your advancement strategy, and a few steps your team can take now to get ahead.

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What’s changing and when

Several key tax updates will take effect on January 1, 2026, and they’re already starting to shape how some donors are thinking about giving. Here’s a quick breakdown of what’s changing:

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  A new 0.5% minimum for charitable deductions

  Starting in 2026, donors who itemize can only deduct charitable gifts if they give at least 0.5% of their adjusted gross income (AGI). Gifts below that amount won’t qualify for a deduction. This may affect loyal donors who typically give smaller gifts each year.

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  Expiration of the current deduction rules (TCJA)

  The expanded standard deduction from the 2017 Tax Cuts and Jobs Act ends in 2025 unless Congress extends it. If it expires, fewer people will itemize, and even fewer will deduct charitable gifts. This change may remove the tax benefit for many middle-income donors.
  One thing that won’t change: the cap for how much donors can deduct for cash gifts. The current rule allowing donors to deduct up to 60% of their income for cash gifts to qualified charities is now permanent.

• 

  A small new tax break for non-itemizers

  Beginning in 2026, donors who don’t itemize will be able to deduct up to $1,000 (or $2,000 for couples) in cash gifts. This is called an “above-the-line” deduction. This doesn’t apply to gifts of stock, property, or donations made through donor-advised funds.

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  A lower deduction cap for top-bracket taxpayers

  For donors in the highest tax bracket, total deductions (including charitable gifts) will be capped at 35% of their income, down from the current 37%. It’s a small change, but it may affect how they plan larger gifts.

What this means for advancement

These changes probably won’t stop people from giving. But they might change how some donors think about timing, tax benefits, and whether their gift still feels “worth it.”

For loyal annual donors, especially those who give smaller amounts, the new rules could be confusing. They may not realize their usual gift no longer qualifies for a deduction. Even donors who aren’t especially focused on tax benefits might pause if they’re unsure what the new rules mean or how they’ll be affected.

That’s why 2025 is so important. It’s the last full year before the changes take effect, and a good moment to educate your donors and help them make a plan. With clear, timely outreach, you can help them feel confident about giving. You’ll also build the kind of trust that keeps donors engaged for the long run.

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What your team can do now

Small steps now can help your team stay ahead, support your donors, and protect revenue next year. Here’s where I recommend you start:

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  Make sure your team knows what’s changing

  You don’t need to turn your team into tax experts, but they should feel comfortable explaining the basics. Take a few minutes in an upcoming team meeting to walk through what’s changing and how it might affect different types of donors. The more confident your staff feels, the more confident your donors will feel too.

• 

  Start educating your donors

  Update your giving pages and donor communications to explain what’s changing in simple, clear terms. You don’t need to get into the weeds. Just help donors understand what the new rules mean and why 2025 might be a good year to give. If your team could use extra support preparing for or crafting donor messaging, EAB’s Advancement Marketing Services can help.

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  Look at giving trends from your own data

  Run a quick report to see who might be affected—like donors near the 0.5% mark or those who stopped itemizing. This will help you prioritize who to reach out to and how.

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  Talk with your campus leadership

  Make sure your president, board, and CFO understand what’s changing. These updates may not seem urgent now, but they could affect giving patterns and revenue in the future. It’s worth starting the conversation so your institution can plan.

Don’t wait to get ahead

There are plenty of things keeping us on our toes this year. With so much changing at the federal level, it’s on us as advancement professionals to help donors understand how these new rules might affect their giving.

By taking a few simple steps now, you can prepare your team, help your donors feel more confident about giving, and keep your program on strong footing heading into 2026.

Meridith Nelson

Director, Partner Development, AMS

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