Sari’s Thought Leadership Published in AFP's Global Advancing Philanthropy Magazine: Seizing the Tax Law Moment

Incredible news...Sari's 5-page article “Seizing the Tax Law Moment” was the featured spread in AFP Global’s Advancing Philanthropy magazine! Donor Boom's tax-smart strategies that position fundraisers to become Generosity Guides™️ for their donors reached 30,000+ top fundraising professionals nationwide.

Read the article below!!

Here’s how fundraisers can lead the greatest shift in giving behavior in decades.

By now, you have likely heard that the One Big Beautiful Bill Act has made a few major changes to the tax deductibility of charitable giving.

But let’s be real. It’s not so easy to wrap our arms around how these changes will affect donor behavior, because the federal tax code is complicated. Even the basics might elude us, which makes it even harder to strategize what to do about it as fundraisers.

It’s time to roll up our sleeves and get into it, because these tax law changes present a rare, transformative moment in our field, and we fundraisers need to seize this moment.

What is so remarkable about this moment? Behavioral economics has shown that people are far more motivated to avoid losses than to pursue gains. The new tax law will create a loss for some donors—largely major donors—who stand to lose a significant tax deduction.

This loss creates the opportunity. Because donors strongly dislike losing a deduction, they will be unusually open to guidance from nonprofit fundraisers—especially

when we can show them ways to preserve some or all of that tax benefit. If fundraisers play it right, we can influence donor behavior in meaningful and lasting ways that benefit both the donor and the nonprofit.

Choose not to lean into this opportunity and donors may still respond—to the detriment of your nonprofit. How? Change breeds confusion, and confusion leads to pullback. Donors may pull back from donating charitably until they figure out what the heck is going on with the new tax law, and you might not see them again for years.

That’s why it’s imperative that we seize the tax law moment as fundraisers and lead the greatest shift in giving behavior in decades.

How The 2025 Tax Law Could Benefit Nonprofits Long Term

As it so happens, the best way to help donors restore some or all of that tax benefit is by guiding them toward strategies that involve giving from their wealth rather than from their disposable income.

Dr. James Russell, professor at Texas Tech University, published important research based on IRS Form 990 e-filings, and his conclusions are clearly summed up: “Gifts of noncash assets predict current and future contributions and growth.” (onlinelibrary.wiley.com/doi/ abs/10.1002/nml.21334)

His research found that nonprofits reporting any noncash gifts grow five times more than those that reported only cash gifts. What drives this phenomenon? Astonishingly, only 3% of donor assets sit in a checking account, leaving your organization to compete for funds that are also used to pay the monthly bills. That means 97% of a donor’s assets— their wealth—is largely invested for a rainy day or could be directed toward your organization.

However, the million-dollar question that hangs over us as fundraisers is how to get our donors to start giving from their wealth. The answer not so obvious, especially when human behavior tends to resist change no matter how much effort we put behind it. And bringing up these topics can feel awkward, as if we’re prying into someone’s personal finances.

That’s why the OBBBA represents a brilliant opportunity. It introduces a pain point for donors. Fundraisers who skill up to meet this moment can lead donors toward a solution.

It's Time To Get Tax Smart

Now, unless you consider yourself a planned-giving expert, your fundraising skills may not have directly crossed paths with taxes. Your tax knowledge may only extend as far as, “Your donation is tax-deductible to the fullest extent of the law.” It’s time to get tax smart. 

Fundraisers can become “Generosity Guides” without venturing into tax-advice territory. By framing examples of how other donors are giving wisely and suggesting questions to bring to financial advisers, fundraisers can stay in their lane while elevating their role as trusted partners in generosity.

Your job is to be able to clearly articulate the basic changes that have taken place under the new tax law and explain at a high level how charitable tools such as donor-advised funds or qualified charitable distributions can be used more tax advantageously. Even if your donor is already giving from their wealth, you should know enough to guide them toward even more tax-efficient ways to give under the new tax law.

So, let’s get into it. We’ll start with tax basics and key terms and then propose tax-smart solutions. Remember, I’m not a tax professional, and neither are you. I have consulted numerous tax advisers and financial experts in my journey to be a Generosity Guide to my fellow fundraisers. When you get a question that you don’t know how to answer, that’s your red line. Tell your donor: “Talk to your tax adviser. Everyone’s situation is unique. The information I’m providing you can help you ask your adviser the right questions.”

Tax Law Basics

Let’s start at the beginning. When you file your federal taxes, you take your gross income, subtract your deductions, and whatever remains becomes your taxable income. You then apply your tax bracket to that number to determine what you owe. Each year, you can choose between the standard deduction (a lump sum determined by the federal government) or itemizing your deductions— whichever benefits you more.

In 2026, the standard deduction is $15,750 for single filers and $31,500 for married couples, which means you would only itemize if your total deductions—including charitable gifts—add up to more than that amount.

What's new this year is that more donors will be eligible to itemize. Taxpayers making $500,000 or less will be able to deduct up to $40,000 in state and local taxes, and that offers a path toward itemization (because $40,000 in deductions is greater than the $31,500 standard deduction for joint filers).

Why a Donor-Advised Fund Is So Valuable Now

Now let’s talk about donor-advised funds, or DAFs. While they’ve grown in popularity slowly, DAFs are meeting their moment now. Why? Beginning in 2026, the first 0.5% of a donor household’s adjusted gross income given charitably each year will no longer be tax-deductible. This affects itemizers, many of whom are your major donors deducting their charitable gifts. For example, a household earning $300,000 would lose the deduction on the first $1,500 it gives annually. That’s a real loss—both psychologically and financially—and it may cause donors to pull back.

This is where a DAF becomes especially valuable. You receive the tax deduction in the year you put money into the DAF—not when you make grants to nonprofits. That timing allows you to “bunch” several years of giving into a single DAF contribution, helping more people itemize and preserve the tax benefit of their charitable giving.

This Is Where You Enter The Scene

By guiding donors to bunch several years of giving into a single DAF contribution, they only hit the 0.5% floor once—in the year they fund the DAF—not every year when they give from it. Take that $300,000 household: The first $1,500 of giving is no longer deductible. If it gives directly to nonprofits each year, it loses that $1,500 deduction annually—$6,000 over four years. But if you encourage the household to put four years of giving into a DAF upfront, it loses the $1,500 deduction only in the first year and can then distribute grants over time without repeatedly triggering the floor.

A DAF also gives donors practical benefits: simpler tax paperwork and a single place to track their charitable giving history.

It is also worth noting that if you have a high-net- worth major donor whose AGI is $3 million, the first 0.5% or $15,000 annually is no longer deductible. The strategy outlined above still applies and yields even greater tax savings. (Saunders, Laura. Nov. 28, 2025. “How the Megabill Changes 2025 Tax Breaks for SALT and Charity.” Wall Street Journal).

Existing Noncash Donors? You Can Guide Them, Too 

Even if you are fortunate enough to receive gifts of appreciated securities like stock from your donors, you can still play a valuable role as a Generosity Guide here. Appreciated stock already gives donors the benefit of not having to pay capital gains tax on the difference between the buy and sell price of their investment, and it costs the donor a fraction of what they ultimately will be donating to you.

However, if they give it directly to your nonprofit, they will still be subject to the 0.5% floor that year, which may neutralize the tax benefit. As a Generosity Guide, you can suggest the following: Talk to a financial adviser about transferring the appreciated stock into a DAF, and then make the donation from there. The capital gains savings will still apply, and it may minimize the impact of the 0.5% annual floor. Again, you’re emphasizing that you are not a tax adviser, but you are pointing them in the right direction and arming them with good questions to ask a professional.

No Longer Exclusively For The Ultra-Wealthy

Here’s where I want to underline an important point:

A DAF is not a tool exclusively for the ultra-wealthy. Any charitable person who could be itemizing should consider using a DAF. Companies like Daffy (daffy.org/ membership) now offer them at a low monthly cost. Your existing financial brokerage firm or a local community foundation are great options, too. Like everything, donors need to do their research to find the best fit.

Honestly, the hardest thing about using a DAF is changing one’s giving behavior. Once donors start using it, they’re going to love it—and they will love you for suggesting it.

The Tax-Smart Move That's Been There All Along

Alternatively, for donors age 701⁄2 and older, a qualified charitable distribution, or QCD, has always been tax-efficient, but the new tax law now makes it the most irresistibly tax-efficient way to give. What is a QCD? It’s an otherwise taxable gift from a traditional individual retirement account, or IRA, to a qualified charity made by an individual who is at least 701⁄2 years old. It doesn’t matter whether you take the standard deduction or itemize, and your gift is not subject to the new 0.5% AGI floor.

At age 73, the advantages grow: A QCD can count toward your required minimum distribution and reduce your taxable income. Among its many benefits, a QCD is wonderful because givers can put these funds to work in support of their favorite nonprofit instead of paying taxes on them!

Beginning in 2026, the annual QCD limit increases to $108,000 per person and will be inflation-adjusted over time. QCDs have been available for years, but with the new 0.5% floor looming, which a QCD sidesteps altogether, there has never been a stronger case for making a QCD.

For couples who both have IRAs and have other resources to live on, this could translate to as much as $216,000 per household directed to your nonprofit in a single year. Imagine the transformative implications for your annual campaign or even your capital campaign if you could point your donors in this direction.

Many donors 701⁄2-plus have never considered this option, or don’t know how it works, because they never had a strong incentive to do so. Alternative options may have been just as tax-efficient until now. That is no longer the case. A QCD is the most tax- efficient way to support a nonprofit under the new tax law and, once initiated with a financial adviser, can be as simple as a dedicated checkbook for this purpose.

And lucky you, if you have a donor roll full of baby boomers.

Guide Donors Taking The Standard Deduction, Too

Donors who take the standard deduction will also benefit from having you as their Generosity Guide. These donors do not itemize charitable gifts; instead, they claim a flat standard deduction and are taxed on their remaining taxable income.

Beginning in 2026, however, donors who take the standard deduction will be able to deduct a limited amount of charitable giving “above the line.” Under current law, this allows up to $1,000 for single filers and $2,000 for married couples filing jointly to be deducted each year, even if they do not itemize.

This represents a meaningful change. Those who routinely take a standard deduction every year—nearly 90% of Americans, according to Turbo Tax—may not know about this tax-savings opportunity. As a Generosity Guide, you can promote this change to your donors and ignite their generosity.

How To Get Comfortable Becoming a Generosity Guide

Perhaps all this feels complex. Immerse yourself in these ideas for a while as I have. 

Role-play with your team. Develop case studies of other tax-smart donors as a model for your donors. Soon, talking to your donors about these things will begin to feel second nature.

And the moment you feel like you’re getting above your knowledge base, stop! That’s your red line. Point them to a financial adviser.

Yes, there are lots of other details associated with the OBBBA regarding charitable giving, some of which are not included in this article. You don’t need to know every detail to be an effective Generosity Guide. That’s the tax adviser’s job.

Lead The Greatest Shift In Giving Behavior In Decades

The upside potential for your organization is enormous. Reframing your role as a Generosity Guide puts you in a much stronger position to help donors shift from giving income to giving wealth to your nonprofit.

This is a win-win for both you and your donor. Providing your donor tax-smart giving guidance signals that you’re looking out for them. It opens new doors and builds trust. Best of all, if you call a donor and let them know you have tax-smart guidance to share, they will call you back—and that conversation is the building block of a beautiful relationship.

Sari is available to speak on this topic (as well as others) to your nonprofit community. Click here to learn about Sari's webinars & speaking engagements!

Author Information

Sari McConnell, CFRE, MBA, is the founder of Donor Boom, a data- driven strategic fundraising firm that helps nonprofits grow their revenue. Treasurer and board member of the AFP Golden Gate Chapter, she is a Generosity Guide and believes you can become one, too. McConnell is not a tax adviser or financial professional.