Navigating the 2026 Philanthropic Landscape with Confidence
Navigating the 2026 Philanthropic Landscape with Confidence
By: Peter Frerichs
Having worked in fundraising for close to two decades, one proclamation you’ll never hear is:
“This is going to be a great year for fundraising.”
Fundraisers, for the most part, are an optimistic lot. Like sales, you need to be able to shake off a “no” and shift to greener pastures. Yet, challenges are always ever-present, and the successful fundraisers and non-profits tend to enter a quarter/cycle/year with a healthy feeling of uncertainty.
Uncertainty is not a desirable state. But what uncertainty does is force us to make alternative plans. President Trump’s “One Big Beautiful Bill” (OBBB) presents some interesting tax-related shake-ups as they relate to philanthropic giving. Some of the shake-ups, like the tariffs, have injected uncertainty into the sector. But not all is uncertain or nebulous for the remainder of 2025 and 2026 onward. Understanding where the downsides lie will help you or your organization reallocate resources and energy to the upsides.
If played well, these upsides could equate to REAL game-changing support for any cause - large, medium, or small.
😢Downsides
Large Donations 🧨
- Perhaps the TNT emoji is unwarranted, but with the increased estate tax exemption, a worry is that fewer individuals will reduce their estate taxes through charitable giving.
Corporate Giving - 1% 🏗️
- With companies now only being able to deduct donations that exceed 1% of their taxable income, the 1% floor could lead to fewer corporate donations, especially from smaller and mid-sized companies.
Individual Itemizers - 0.5% 🏗️
- Individuals who itemize deductions can only deduct charitable contributions exceeding 0.5% of their adjusted gross income (AGI).
Fewer Taxpayers Itemizing 🤷♂️
- Increased standard deductions could lead more taxpayers to opt for the standard deduction, reducing the number of taxpayers claiming charitable deductions and potentially impacting overall giving.
👍Upsides
Permanent Above-the-Line Deduction 🤙
- For non-itemizers only, the OBBB will permit single filers to deduct $1,000 and married couples to deduct $2,000 for charitable contributions. This could encourage more moderate giving.
Permanent Estate Tax Exemption 💸
- The estate tax exemption will remain high - $13.99 million for individuals and $27.98 million for couples in 2025. In 2026, it will rise to $15 million and $30 million, respectively. High-net-worth families will now be able to engage in more thoughtful (certain) planning about charitable bequests and legacy gifts.
Takeaways for Fundraisers, Executive Staff, and the Board
To begin, donors who are passionate about your cause will always find a way to give. Yes, the downsides are worrisome, but two opportunities excite me.
- The cultivation of younger adults who either give small or are just kickstarting their philanthropic journey is a definite opportunity with a $1,000 or $2,000 standard deduction waiting to be deployed. Young adults are becoming increasingly “philanthropically aware,” and getting them on that journey with your organization early and often is critical to a long-term, fruitful relationship.
- The “Great Wealth Transfer”
Baby Boomers are poised to pass trillions in assets over the coming decades to two recipients:
- Heirs (Gen X and Millennials primarily)
- Charities
Here is where I’d like to present some concrete options that fundraisers should incorporate in their conversations with individual donors or prospects over the age of 55. Much has been written on Donor-Advised Funds (DAFs), which are fantastic vehicles for planned giving over time. My assumption is that nearly every fundraiser knows about DAFs at this point, and if you don’t, a quick search will yield weeks of reading material.
Yet, DAFs aren’t the only planned giving game in town. Current and potential prospects seek options, and while the decision will lie in the hands of the donor and their tax advisor, presenting a range of options shows not only that you’ve done your homework, but also gives you a better shot at zeroing in on the specific interests and priorities of that individual.
Charitable Remainder Trust (CRT)
A CRT is a type of irrevocable financial arrangement that allows a person to donate assets of any kind to charity while still receiving income from those assets during their lifetime or for a specified period.
There are two types of CRTs:
- Charitable Remainder Annuity Trusts (CRATs)
- CRATs distribute a fixed annuity amount on a yearly basis, but additional contributions are not permitted.
2. Charitable Remainder Unitrusts (CRUTs)
- CRUTs will distribute a fixed percentage, and additional contributions are permitted. The fixed percentage is revalued annually and based on the balance of the trust assets.
Cash, real estate, publicly traded securities, and some types of closely held stock, with the exception of C-Corp stock, can be donated to a CRT. The CRT’s investment income is tax-exempt, but the named income beneficiary must pay income tax on the stream they receive.
CRTs are popular with people with long-term appreciated assets like non-income-producing property, for example. Once the property enters the trust and is subsequently sold, the sale is tax-exempt. The individual preserves the market value of the asset as opposed to paying capital gains taxes, thus allowing more money to be split among the beneficiary and the chosen charities.
Charitable Lead Trust (CLT)
A CLT provides financial support to a charity for a specified period, after which the remaining assets are transferred back to the donor or their heirs. A type of irrevocable trust, the donor funds the trust in the same manner as the CRT, and the trust then distributes payments to the charity on at least an annual basis. The donor and trust set a giving period, and once the period ends, the assets are then distributed to the donor or other designated beneficiaries.
The word “lead” in CLT refers to the “lead interest” of the trust - the charity. The charity is the one that is entitled to the trust’s payments for the specified term, and the donor and beneficiary are secondary.
Like the CRT, there are two types of CLTs:
- Grantor Charitable Lead Trusts (GCLTs)
- With GCLTs, the grantor may take an income tax charitable deduction based on the present value of the future payments to the charity.
2. Non-Grantor Charitable Lead Trusts (NGCLTs)
- In this scenario, the trust is considered the owner and may claim unlimited income tax charitable deductions. An NGCLT offers greater benefits if the owner wants to pass appreciated assets to heirs and minimize estate or gift tax consequences.
Qualified Charitable Distribution (QCDs)
QCDs are aimed at individuals aged 70½ + to donate directly from their IRA to a qualified charity. Here's how they work:
The individual may donate up to $100,000 per year as a QCD, and if married, their spouse can also donate up to $100,000 from their IRA. The IRA custodian, typically a financial institution or entity that holds and manages the individual’s IRA, is responsible for maintaining account records, processing transactions, and ensuring compliance with IRS rules.
* Important - The IRA custodian sends the funds directly to the charity. The donor cannot take a distribution first and then donate it to themselves.
What’s the big advantage?
QCDs count toward the donor’s Required Minimum Distribution (RMD) for the year and are excluded from taxable income, which can be beneficial for tax planning. QCDs can reduce taxable income, possibly lowering Medicare premiums and tax liability, and are especially beneficial if the donor does not itemize deductions.
Parting Thoughts
I love an incentive to get new and younger donors supporting early. I also love an incentive that provides individuals with certainty around wealth transfer planning, the consideration of additional gifting, and charitable giving strategies in general to meet individual estate and tax objectives.
One caveat, of course - like any legislation, future changes in Congress could result in a repeal. This is a window in time, and one that will not remain open in perpetuity.
