The One Big Beautiful Bill (OBBB), passed by Congress last year, spans more than 870 pages and includes a wide range of policy changes. Not an exercise in brevity. Yet several provisions could meaningfully influence charitable giving in the United States, presenting both opportunities and challenges for the nonprofit sector.
We are now one year removed from the bill’s passage, after which donors have made charitable decisions under its provisions. While its long-term effects have yet to be fully realized, a clearer picture of its impact on philanthropy will emerge over the coming year. The 2027 edition of Giving USA: The Annual Report on Philanthropy, widely regarded as the nation’s most comprehensive report on charitable giving, will assess those effects when it is released next June.
The legislation will influence how millions of Americans think about charitable giving and whether they choose to make gifts. It will also cause many nonprofits to rethink how they engage, cultivate, and solicit their donors and friends. Here are three examples:
- A recent report by the Lilly Family School of Philanthropy and CCS Fundraising estimates that $5 billion less may be contributed because of the bill. When we consider this in the context of roughly $617 billion contributed in 2025, it means less than a 1% fiscal impact.
- The same study suggests that six to eight million Americans may return to making a gift each year. Though the dollar totals for these gifts won’t likely be enough to offset a $5 billion reduction, the vastly more important outcome is that more people may become charitable donors.
- The Generosity Commission, for which I chaired the planning and on which I served as counselor, published its report in September 2024 and recommended increased tax deductibility—this was included in the OBBB and has a direct line of impact to more Americans giving. I’d term that a win for Congress, the Commission, and generosity in America.
It’s interesting to think about what else might be affected by the legislation.
Currently, only about 10% of Americans itemize deductions on their tax returns. It’s interesting to note that prior to the 2017 Tax Cuts and Jobs Act (TCJA), about 30% of Americans itemized.
For people who want to give but in the last few years were non-itemizers, this gets them back in the game. For married couples, the new allowance totals $2,000. The Lilly Family School of Philanthropy study suggests this may incentivize another 8 million people to give. That’s another 8 million donors for thousands of causes, and 8 million more individual decisions which help to make people feel just a bit more connected to their world and perhaps to believe they have agency.
For itemizers, only the amount above 5% of income can be deducted. An example: if you earn $500,000 a year, 5% is $25,000. Anything above that amount is subject to deductibility. For those in the 37% bracket, it gets even stiffer. And corporations can deduct only amounts above 1% of their pretax profits. These last two provisions are what cause the Lilly School to state that fewer overall dollars will be given.
In effect, for the largest donors, the bill makes giving more expensive.
All of this raises the question of whether people are affected by tax deductibility. The answer is yes. That is, some givers aren’t and some are. Polls and surveys in other parts of American life suggest that people do not always respond authentically when asked how much deductibility impacts their gift decision-making. I believe that this will have a significant effect on giving, and the experience after the 2017 TCJA supports this.
But this legislation will create changes in behavior. We’ll need to see how this works out and how donors negotiate the interactions between these provisions. We do know enough to make some suggestions for meeting the future rather than waiting to see what happens:
- Nonprofits should immediately begin educating their donors and friends in advance of next year’s cycle of Giving Days. Colleges and universities might consider leaning into educating young alums—many without a big mortgage deduction yet—that their gifts can make a real difference. Promoting gifts from previous non-itemizers might also nicely expand the percentage of participation.
- For donors in states with high property taxes, the percentages of itemizers grew to nearly 15%, and this may increase further. Some will do so in one year and then pause for a year or two. Smart institutions will engage their alumni or donors in ways that show what they can do and how they can give.
- Re-read the Generosity Commission report. There are ideas that can help us all think about what has changed in generosity in the past several decades. History is a guide here.
- JGA will host a webinar in September with Brian Flahaven, Vice President of Strategic Partnerships at the Council for Advancement and Support of Education, during which we’ll talk through the issues surrounding the OBBB and various ideas for advancement team members to consider. The link to this webinar will be featured in the JGA Newsletter. You can sign up to receive it here.
As mentioned earlier, the Generosity Commission issued its report less than two years ago and called for a national conversation. The Commission did its homework and only now can we see what happens when other forces and events come together in alignment with its key ideas.
It will be exciting to see how things might come together in this vast, pluralistic, idealistic, and flawed Republic as the ideas from the report help make giving and volunteering more dynamic and evergreen. With so many challenges and so much tumult in society, it’s nice to see what looks like a real win coming.
Many thanks to the Generosity Commission, CASE, Giving Institute, Lilly Family School of Philanthropy, and to millions of veteran donors. And welcome to millions of new Americans who may discover the satisfaction and impact of charitable giving.
