How Nonprofits Will Be Impacted by the One Big Beautiful Bill Act in 2026

H.R. 1, better known as the One Big Beautiful Bill Act (OBBBA), which was passed by Congress and signed into law, fundamentally reshapes charitable giving in America. Beginning in 2026, tax changes will impact how donors across all income levels approach their contributions. Rather than scrambling to react, your team can proactively adapt fundraising strategies to maximize these new opportunities. 

The game-changing universal deduction 

The most significant change affects 90% of taxpayers who take the standard tax deduction. Starting in 2026, these donors can deduct up to $1,000 (individual) or $2,000 (couples) for cash charitable contributions, even without itemizing.  

This change dramatically expands the pool of tax-motivated donors. This means that promoting tax benefits in every donor appeal becomes relevant again. 

• Key Takeaway: Update your donation forms to highlight this new deduction and create email campaigns specifically targeting your organization’s smaller donors who previously received no tax benefit from giving. 

Strategic Segmentation: Your Roadmap to Success 

The key to thriving under these charitable tax changes lies in donor segmentation, allowing you to tailor your fundraising approach to each group’s new reality. Here are a few examples. 

Group 1: Universal deduction donors 

Starting in 2026, you can target non-itemizers and small-to-mid-level donors with messaging such as “Your gift now qualifies for a tax deduction, even if you don’t itemize!”  

• Key Takeaway: Use donor data to identify supporters who haven’t previously received tax benefits and build targeted campaigns emphasizing this new advantage. Automate acknowledgment receipts to include current tax language. 

Group 2: High-income itemizers 

Major donors face new challenges. They won’t receive credit for the first slice of their giving (approximately 0.5% of income), and their tax savings drop slightly from 37 cents to 35 cents per donated dollar.  

• Key Takeaway: Be proactive with these supporters. Help them explore multi-year pledges or gift-timing strategies to maximize benefits greater the new deduction floor. 

Group 3: Donor-advised fund (DAF) holders 

DAF contributions remain deductible when initially funded, but grants from DAFs don’t qualify for the new universal deduction.  

• Key Takeaway: Focus your messaging on immediate impact: “Your DAF gift can provide immediate support to our mission.” To help guide their giving under new laws, consider webinars on strategic DAF giving and pre-filled grant request forms. 

Group 4: Legacy giving prospects 

The estate tax exemption permanently doubles to $15 million per person ($30 million per couple), making legacy giving even more attractive for wealthy families.  

• Key Takeaway: Continue promoting planned giving, retirement asset donations, and charitable trusts. The math remains compelling for tax-efficient mission support. 

Group 5: Corporate partners 

Companies now must give at least 1% of taxable income before any contributions qualify for deductions. A business giving 0.5% receives no tax benefit. A business giving 2% only gets credit above the 1% threshold.  

• Key Takeaway: Focus your cultivation efforts on companies already at or above 1% and structure multi-year pledges to help others cross the threshold. 

Group 6: Year-end bunchers 

Some donors might combine multiple years of giving into one tax year to overcome deduction floors.  

• Key Takeaway: Identify these patterns in your giving history and send tailored impact reports with strategic timing suggestions. 

Group 7: Education-focused donors 

Starting in 2027, donors in participating states can claim up to $1,700 as a dollar-for-dollar credit for K-12 scholarship contributions.  

• Key Takeaway: Education nonprofits should partner early with scholarship funds to retain support, while other organizations should be aware of potential donor redirection. 

Implementation Tactics 

Here are a few ideas for each team member to execute on, and these start with the chief executive. 

Executive Directors 

• Use dashboards to track OBBBA-driven giving trends and brief your board accordingly.  

• Ensure your development team has resources to maximize year-end giving under the new rules. 

Development Directors 

• Create saved filters in your constituent relationship management (CRM) platform for each donor segment.  

• Develop strategic talking points for major donor conversations, particularly around multi-year giving strategies that help donors optimize their tax benefits. 

Staff and Volunteers 

• Update donation forms to explain the universal deduction.  

• Add “New in 2026: Above-the-line deduction” messaging to online giving platforms.  

• Flag universal deduction donors for special stewardship recognition. 

While OBBBA creates complexity, it also opens doors to greater inclusivity in charitable giving and more personalized donor stewardship. The nonprofits that thrive will be those where fundraisers effectively segment the donor base, communicate clearly about tax benefits, and maintain focus on mission impact. 

Your CRM system becomes crucial for tracking donor segments, automating appropriate messaging, and monitoring the effectiveness of tax-focused approaches. Test different messaging strategies, such as tax-focused versus mission-focused, to determine which resonates best with each segment. 

The 2026 implementation deadline provides a critical window for preparation. Use this time to analyze your donor base, update systems and processes, and train your team on new conversation frameworks. Most importantly, remember that building a connection with your mission matters most, but smart tax strategies can significantly enhance your ability to serve your community. 

By Jeff Vogel, DonorPerfect and The Nonprofit Times  
Original Article