THE TAX CODE CHANGED. WHAT DOES THAT MEAN FOR FUNDRAISING?

Editor’s Note: Beginning in 2026, taxpayers who take the standard deduction can also deduct charitable gifts—up to $1,000 for individuals and $2,000 for married couples. Wealthier taxpayers who itemize will face some new limits on charitable deductions, reducing the tax benefit of large gifts. The 60% of adjusted gross income limit for cash gifts to public charities remains unchanged. In short: most everyday donors may receive a better tax benefit, while some major donors may receive a slightly smaller one. These changes continue to create quite a buzz in professional philanthropy circles.

The Short Answer: Stay Focused on the Fundamentals

A colleague recently asked me, “How are you changing your fundraising advice based on the new tax law?”

My answer was simple: we’re not.

I know that such a calm response can be unnerving in a moment like this. Tax law changes create uncertainty, and uncertainty has a way of getting loud. Headlines suggest dramatic shifts. Boards ask what it means for projections. Fundraisers wonder whether donors will behave differently tomorrow than they did yesterday.

Those are fair concerns, but not new ones.

Over the years, we have seen changes in estate tax law, capital gains treatment, deduction thresholds, and reporting requirements. Each time, there is understandable concern that donor behavior will fundamentally shift. And each time, the organizations that remain grounded in relationship-based fundraising tend to experience far less disruption than expected.

The reason is straightforward: tax considerations can influence the timing or structure of a gift, and in some cases, they may create hesitation. But they rarely determine the whole decision. A strong philanthropic relationship still gives donors a reason to stay engaged.

Fundraisers Do Not Need to Become Tax Advisors

Let me be clear about the tax piece. I am not a tax professional, and fundraisers do not need to be either.

Caps, floors, itemizers, non-itemizers, these are real considerations. But most fundraisers will never have enough information about an individual donor’s tax situation to build an Ask around that level of nuance. As always, donors should and will consult their own tax advisors about their specific circumstances.

There are useful reports available for those who want the details. Some suggest the number of donor households could increase, while corporate giving and major individual giving could take a hit. Those headlines are worth understanding, but the practical implications for relationship-based fundraising are more limited than they may first appear.

It's easy to feel pulled in different directions when these headlines are front and center. If you're feeling the urge to "change everything," instead, ask yourself, “What does this moment require us to do well?”

Why Donors Give Matters More Than the Tax Headline

People generally give for one of three reasons: what the gift does for them, what it does for the organization, or what it does for the community.

All three can matter, but usually one is doing most of the work.

Tax benefits fall into the first category, what the gift does for the donor. When that is the primary motivation, the relationship is more transactional. Giving may rise or fall with legislation, markets, or other external conditions.

But when an organization has built a real philanthropic relationship, the gift is usually connected to something deeper. The donor understands what their giving makes possible for the organization and the community. They feel informed. They feel valued. They have confidence in the leadership and the work.

That kind of giving is more resilient.

This is why the answer to uncertainty is not to chase the moment. If we allow external factors to drive our fundraising strategy, we will always be playing catch-up. The better path is to build the kind of fundraising program that can withstand these ebbs and flows.

In Uncertain Times, Donors Need More Clarity

When the environment feels unsettled, donors do not need more generic urgency. They need more clarity.

That starts with cultivation and stewardship.

They need personal communication. They need to hear what’s happening inside the organization. They need to see value through interaction, not just through appeals. They need opportunities to ask questions, offer advice, and understand how their philanthropy fits into the larger picture.

This is also why small group interactions can be so powerful. Major donor relationships are special relationships. They should feel that way. Bringing people closer through thoughtful non-solicitation activity helps answer the questions donors are often quietly carrying: Why this organization? Why now? Why should I feel confident moving forward?

Confidence in the organization matters more than the latest tax legislation. It reduces hesitation. It shortens decision cycles. It allows donors to make generous decisions even when the external environment feels murky.

The Ask Still Needs to Happen Personally

A changing environment does not mean you stop Asking. It means you Ask thoughtfully.

Every major donor should have a personalized Asking plan. Not a general appeal. Not a hopeful number pulled from a spreadsheet. A real plan that considers the donor, the relationship, the timing, the purpose of the gift, and the value being presented. And then the Ask should happen personally.

Personal conversation remains the most reliable way to understand how external factors are, or are not, influencing a donor’s decision-making. Technology, policy, and economic conditions will continue to evolve, but the core dynamic of major giving has remained remarkably consistent: people make meaningful philanthropic decisions when they feel informed, valued, and connected to purpose.

That happens most reliably in conversation. Not in email alone. Not in proposals alone. Not in dashboards alone.

When a Donor Hesitates, Do Not Assume It Means No

Environmental factors are real, and they may affect some of your most important donors. If that's the case, avoid panicking. Instead, focus on better listening.

Often, donors are not saying no. They are expressing hesitation. You might encounter barriers, or more complex questions during your conversations. A fundraiser’s job is to understand what is underneath the surface and keep the conversation concrete.

If a donor says, “not now,” do not leave timing vague. Ask when it would be right to revisit the conversation. If external factors are influencing timing, ask what turning point the donor would need to see before continuing the discussion.

That kind of question does two important things. It respects the donor’s concern, and it gives the relationship somewhere to go.

I recently interviewed the president of a major college regarding the feasibility of a campaign in his community. His view was direct: “As uncertain as the world is now, if we wait for conditions to improve, nothing will.”

Many major donors feel the same way. They are not necessarily stepping away from philanthropy. Some are turning toward philanthropy as part of their response to uncertainty.

Flexibility Can Keep the Relationship Moving

If a donor cannot make the full commitment now, there may still be a meaningful path forward.

Often, the simplest option is time. A donor who hesitates at a larger commitment today may be comfortable pledging over three to five years. Another donor may be willing to commit to what they can confidently give now while keeping the door open for a larger conversation later.

These are all ways to keep a donor authentically engaged. That will prove more meaningful over time than mistaking a "not now" for a "no."

In one real example, a client was seeking a $500,000 gift. The donor had hesitations about that level of commitment in the current environment. They ultimately committed to $125,000 over five years, the amount they could confidently give now.

Was it the original goal? No.

Was it a meaningful commitment that preserved the relationship and kept the donor engaged? Absolutely. In fact, within weeks of making this six-figure pledge, the donor approached the client, saying, “In due course, I’m sure I can do more.” By being flexible, they secured real cash today, advanced the donor relationship, and positioned themselves for even greater giving in the future.

What This Means For Your Fundraising Program

First, do not try to become your donor’s tax advisor, rewrite your fundraising strategy, or assume hesitation means the relationship is weakening. It can be easy to be reactive, but keep your eye on the big picture.

That means, return to the fundamentals that make fundraising durable:  thoughtful stewardship, clear value, direct conversation, and flexible paths to commitment.

Tax law changes might impact how some donors choose to give. They may require you to anticipate questions, hesitation, or a need for more flexible pledge conversations. But they should not replace relationship-based fundraising as the center of your strategy. 

This is a good moment to look closely at the strength of your major donor relationships. Not because everything needs to change, but because uncertainty tends to reveal where the relationship is strong and where it has been running on habit.

A few questions to pose to your Development team:

• Are we communicating personally with major donors, or relying too heavily on broad appeals?

• Are donors hearing from us only when we need something, or are they being regularly informed, appreciated, and engaged?

• Do we understand what motivates each major donor’s giving?

• Have we mapped a thoughtful Ask for each major donor, including timing, purpose, amount, and flexibility?

• When a donor hesitates, do we know how to keep the conversation specific rather than letting it drift?

If the answer to any of those questions is unclear, that's where your work lies. Spend time deepening relationships with donors so that you understand what they need in order to move forward with confidence.

Tax law may change. The economy may shift. Headlines will come and go. But generosity still grows through trust, clarity, and conversation.

If your organization is sorting through how tax changes, economic uncertainty, or donor hesitation should affect your fundraising approach, please reach out. I would welcome a conversation.