Navigating 2025 tax law: strategic guidance for nonprofits

Dani Cluff: Good morning and good afternoon, depending on where you’re logging in from today, everyone. Thank you so much for joining us. Today, I have the wonderful Sari McConnell with us. Thank you so much, Sari, for joining us. Sari’s gonna tackle a huge topic for us today, looking at 2025 tax law changes and how they impact your nonprofit. So I’m so glad you’re all joining with us today. Keep a close eye on what we’re talking about and how it impacts you as we move through this webinar.

Just a few notes. We are recording the webinar today. So if you wanna go back and rewatch it, in case you miss anything or you wanna review any of the stuff that Sari is going over, you are going to be able to do that. You’ll get an email later this afternoon with a link to the recording.

As we move through all of this, we will have a Q&A going. That’s gonna be that little Q&A box in your settings bar. That’s a great place to add your questions, and we’ll get to those at the end. If you put any questions in the chat, I will be monitoring so I can keep track of those. But the Q&A box is going to be your best bet for making sure we don’t miss anything as we go.

If you’re not familiar with Bloomerang, we are a giving platform built for purpose, created to help nonprofits build stronger relationships and grow their impact. Our tools like donor and volunteer management and online fundraising, peer-to-peer campaigns, and custom donation forms are designed to help organizations of all sizes thrive. We believe that when fundraisers have the time and insights they need, they can focus on what truly matters, which is making a difference in your communities. If this resonates with you, let’s connect. We wanna know how we can help you achieve your mission. We’ll launch a poll at the end of today’s webinar where you can opt in to receive more communication from us, but also to receive more communication from Sari.

And again, a huge metaphorical round of applause for Sari. Thank you so much for joining us today. I know you have a lot to cover, so I’m gonna stop talking and get out of your way so you can dive in.

Sari McConnell: Thanks, Dani. Thanks so much for the opportunity to speak to Bloomerang users. As a business owner myself and a strategic fundraising consultant, I advise many of my clients to use Bloomerang. I think it’s such a smart platform, and kudos to all the people who’ve joined us today in professional development mode. You’re on the right track.

So I’m gonna share my screen. As Dani said, this is a content-rich conversation we’re gonna have, because it’s about the tax law and what nonprofits can do to use it to their advantage to ignite generosity. So I would say upfront, this is not a great webinar for multitasking. I have a couple of really important slides for you to pay attention to, especially in the beginning, in order for this strategy to make sense to you.

My name is Sari McConnell. I’m the founder of Donor Boom. We’re a strategic nonprofit fundraising firm. I’m a nonprofit expert, CFRE certified, and we are a certified women-owned business.

Maybe the most important thing that I wanna tell you as a professional fundraiser is that I’m not a tax adviser, but I am a tax-smart generosity guide. Today’s presentation is going to encourage you to become a generosity guide too. My goal today is to help you become a tax-smart generosity guide, using your knowledge of the new tax laws and their changes to help you ignite donor generosity. It isn’t just enough to understand what’s happened. Our thought leadership at Donor Boom helps you figure out how to turn the changes into strategic opportunities for growth for your nonprofit.

Our thought leadership around becoming a generosity guide is going to enable you to shift donor behavior, which is one of the hardest things to do. We humans do not like changing our habits, but the new tax law does give big opportunities for us to really influence donor behavior and change how they give to your nonprofit. Most importantly, for individual giving, it’s about shifting people from giving from their disposable income to giving from their assets and their long-term wealth. Hopefully, you’ve crossed paths with Professor Russell James from Texas Tech University. His research shows that getting folks to give from wealth instead of disposable income significantly leads to greater giving over time. The question becomes, then, for all of us: how do we get people to make that change, to give from their wealth instead of from disposable income? That’s what this conversation today is going to be all about.

So in this webinar, obviously, you’re gonna learn the generosity guide strategy. But in order for you to become a generosity guide, or even understand the strategy, you need to understand how federal taxes work and how deductions work. Our tax code is complex, so I’m gonna break it down for you in the simplest terms possible. There are a lot of acronyms and unusual key terms that are part of this conversation, and every generosity guide should know them. It will help you inhabit that role. And then the OBA, the One Big Beautiful Bill Act, we’ll call it OBA or the 2025 tax law for the sake of this presentation.

Once you understand how our tax code works, I’m gonna talk to you about what the OBA changes are and how they impact both individual and corporate giving. Once we get through that, the generosity guide strategy is going to seem very intuitive and very clear.

We have this new tax law that passed in the summer of 2025. Any kind of tax change creates uncertainty. It changes how we have to think about our spending behavior, our earning behavior, our filing behavior. And with respect to charitable giving, which is tax deductible to the fullest extent of the law, tax changes create giving uncertainty. Donors might be totally out to lunch. They’ve not yet heard that there are changes, or they’ve heard something and they don’t understand the implications or really what the changes are themselves. They might not understand how to interpret the changes. Is this good news for me, bad news for me?

Worst of all, and I’ve seen articles in The Wall Street Journal with this headline, “Give Now or Give Later,” change creates not only uncertainty but paralysis. You may find donors wait until they figure out what’s going on, hopefully, one day, and they pause their giving. You’re never gonna have a conversation, necessarily, with a donor who says, “I’m waiting.” You just won’t hear from them, and it contributes to your lapsed donor metrics.

I promised you that I’d explain how federal taxes work. You need to understand the basics in order to then understand the changes and then the generosity guide strategy. Here it is, folks. You’ve got your household income, minus your deductions, equals the taxable income, the income you owe taxes on, multiplied by the tax bracket you’re in depending on how much you make, and that equals the federal taxes due.

Now, I’ve underlined the word “deductions” because already, the tax code makes it a little bit more complicated than this simple formula. All taxpayers have two choices when it comes to taking their deductions. You can take the standard deduction, which is a predetermined lump sum set by the government. In 2026, that lump sum is $32,200 if you’re filing married or jointly, and it’s $16,100 if you’re single. If you take the standard deduction, you’re not collecting receipts of any kind for anything. You’re just saying, “I’m gonna take the lump sum, and I’m done. I’m gonna pay my taxes.”

Alternatively, you can itemize your deductions. There are certain buckets of spending that are eligible to be deducted. As you know, charitable gifts are tax deductible to the fullest extent of the law. If you own a home, there’s mortgage interest. If you have excessive medical expenses, those count. State and local taxes fall under this bucket. If you’re a business owner, there are lots of them. Now, which camp do you fall into? Each and every year, you decide if you’re taking the standard deduction or itemizing, and you’re always picking whichever is more beneficial to you. So in a given tax year, if you have loads of deductions that far exceed the lump sum given to you in the standard deduction, in that year, you’re gonna itemize. The following year, you might not have all those deductions, and you could go back to being a standard deduction type of taxpayer. So each year, you’ve gotta calculate which path you’re going on.

Now I wanna point out something that is obvious, but actually not so obvious to us nonprofit fundraisers. We say on all of our donation transaction pages that donations are tax deductible to the fullest extent of the law. But you can see here in these two paths that charitable gifts only count as a deduction for households who are itemizing. If you’re taking the standard deduction, you just take the lump sum. I don’t know if everyone on this call realized that on the front end, but that’s pretty profound to file away.

As I mentioned, taxpayers choose the higher of the two. Most in the United States take the standard deduction. In recent years, the lump sum amount has risen significantly, which has pushed many more people in the last couple of years to taking the standard deduction. The higher that lump sum amount is, the more itemized receipts you need to exceed it and be an itemizer. Well, the OBA law creates new opportunities to itemize, which is good news for nonprofits because of that tax deduction I mentioned.

Okay. We’re gonna pause here for a second. Dani, can you throw up the poll? I wanna get a sense from everybody on the call of your familiarity with the OBA law and the changes to the tax deductibility of charitable gifts. One being “I’m not comfortable at all,” five being “I’m good, I know it all.” So go ahead and answer the poll. I often get quite a wide range on these calls, so I’ll be interested to see what you folks come up with. Dani, I’m gonna count on you to publish the results when you get a chance.

Dani Cluff: I think we’re slowing down, so I will share those. Can you see those?

Sari McConnell: Yes. Okay. Great. So look at this. No matter what level of knowledge you have about the changes, which I’m about to explain to you, you’re in great company, because there’s a little bit of everybody on this call. And you can also see we’re professional fundraisers. Right? These changes impact our sector. And look how many of us don’t really know what the changes are. Now imagine how many more people, your donors, really don’t know what’s going on. We’re probably more exposed to understanding what has happened with this law than your average Joe.

Okay. That’s really helpful. So now we’re kind of pausing on talking about the OBA and how federal taxes work, because I want you to understand a couple of very important key terms and acronyms that need to be part of your vocabulary as a generosity guide and will lead to your understanding of the changes in a much more concrete way.

Let’s talk about the SALT deduction. SALT is an acronym for state and local taxes. State and local taxes can be deducted. Itemizers often use these to become an itemizer instead of taking the standard deduction. Back when Trump was first president, the SALT deduction was ratcheted way, way, way down. It was capped at $10,000. Many taxpayers in high-tax states were outraged, because this was a huge part of their tax benefit. They had a huge deduction, and they could only take $10,000.

Well, with this new law, the SALT deduction expands to $40,000 for adjusted gross incomes, household incomes, under $500,000. It expires in a few years, but for now, many more people will be able to take their state and local taxes and apply them against their federal taxes. Especially if you’re in a high-tax state, a lot more folks are now, this coming year, going to be itemizing again. Remember I told you, you make that choice each and every year. I also wanna remind you that the standard deduction this year, if you’re filing jointly, is $32,200. So if you can take all $40,000 of your state and local taxes, $40,000 is greater than the entirety of the standard deduction lump sum of $32,200. If you earn less than $500,000 and you pay $40,000 in SALT, you are itemizing. That also means they’re itemizing your charitable gift, and that’s good news for you.

Okay. Completely unrelated to SALT, but a very important concept. I’m sure you’re seeing the donor advised fund surface more and more. I wanna talk about a specific aspect of it. A donor advised fund is a financial instrument that anybody can use. It’s a charitable giving account, like a savings account, except that the funds you put into it are restricted to giving to 501(c)(3) nonprofits only. All the funds that someone puts in their DAF must go to nonprofits, and they can’t claw it back.

Why do people want to open up a donor advised fund? There are lots and lots of reasons, but the biggest one is that donors get their tax deduction the year they contribute to the DAF, not when they distribute it. So if they have, let’s say, a windfall of money, or they’re trying to think strategically about how to itemize this year, they put a whole bunch of money into the DAF in year one. They get the tax benefit then. They itemize then. And as they move the money from the DAF to nonprofits, those are not taxable events. You had it already. It was when you put the money into the DAF to begin with.

I also wanna point out that the DAF market has really matured. There are a lot of different ways you can open up a DAF. A lot of different institutions offer them, and the price structure and the services that you get are very varied and broad. This means that this is not a tool for high-net-worth individuals only. I would argue that a DAF is for anyone who takes their charitable giving seriously, where it’s a part of how they spend their money every year. It is very accessible, fee-wise and in the minimum that you can put into a DAF. You just have to go shopping for the DAF that fits your needs. This might also be a big takeaway for some folks on this call, and I encourage you to look into opening up a DAF if this describes you.

Okay. A completely separate topic again. We’re now gonna talk about IRAs, RMDs, and QCDs. An IRA is an individual retirement account. When we talk about an IRA in this conversation, we’re talking about a traditional IRA, not a Roth. The reason is that a traditional IRA is pretax dollars. Therefore, there are tax benefits afterward if you do something special with it. With the Roth IRA, the taxes were taken out before you put the money in, so there’s no further tax benefit afterward.

RMD stands for required minimum distribution. This begins for folks at age 73. You must take an RMD every year from your IRA starting at age 73, even if you don’t need the funds. Why does the federal government make you do this? Because they want to start taxing you on the money sitting in your traditional IRA. So they force you to take a percentage every year starting at age 73.

Related to this, QCD is a qualified charitable distribution. This can be made by anyone from their traditional IRA beginning at age 70½. If you make a charitable gift from your IRA, it is fully tax deductible, and if you’re 73, it counts toward your RMD requirement. RMDs, as I mentioned before, are taxed when you take them out of your IRA unless they’re donated. So there are huge tax benefits for folks who have an IRA and who start giving from their IRA as a QCD. Again, they can start doing it at age 70½.

Now you might say to yourself, “Well, they could just write a check out of their checking account or use their credit card, and that’s fully deductible too.” I’m gonna show you that that game has changed a little bit, and you’re gonna see that a QCD is now going to be the most tax-beneficial way someone can give to a nonprofit, and they don’t need to be itemizing. They can be taking the standard deduction and still use it. I’m getting a little bit ahead of myself, but these three terms, I really want you to pay attention to: IRA, RMD, QCD. They’re gonna play an important role in your lives, hopefully, as you become a generosity guide.

Now that we know how federal taxes work and we know the key terms and acronyms, let’s talk about the biggest changes from OBA on tax deductibility. We’ve got one tax law, and as I mentioned, you’ve got two paths as a taxpayer: itemizing or the standard deduction. With the changes in the tax law, the folks who are taking a standard deduction actually get a new tax break that they’ve never gotten before. I’m gonna tell you what that is shortly, but I want you to keep that in mind.

What is far more complicated are the folks taking the itemized approach. Now their itemized charitable gifts, their tax-deductible gifts, are at risk. Why? Because they’re no longer 100 percent tax deductible. So there’s gonna be some loss here, which itemizing donors are not gonna be happy about. But if they cross paths with a generosity guide like you, you’re gonna be able to show them how to change how they give so that they can recoup some or all of that benefit, and they’re gonna love you for it.

The OBA tax law does impact corporate giving, which I’m gonna cover very briefly, but let’s talk about individual giving first. We’re talking about itemizing folks right now. I mentioned to you that when they deduct their charitable gifts, it’s no longer at 100 percent. So it’s really bad news. It’s lemons in this tax law, and what I’m about to tell you is how to turn it into lemonade for your donors. What OBA is doing is pinching the tax deductibility of charitable gifts. Any change, especially this really unusual change, creates donor confusion, donor pullback, or they’re oblivious and they just keep giving the way they’ve always been giving. As the nonprofit, you don’t lose, but you also don’t gain any generosity as a result.

However, as I mentioned, the OBA tax law is a pain point for folks taking an itemized approach, because they used to have 100 percent tax deductibility of their charitable gift, and now they only have some. You, as a generosity guide, can influence their giving behavior now in a way that will restore most or all of their benefit and ignite generosity for your nonprofit. I’m gonna show you in a second what I mean by that.

Beginning in 2026, and I just wanna clarify, this means people who are preparing their taxes in 2027 for the prior year. That’s what this all affects. The first 0.5 percent of your adjusted gross income is not deductible for charitable gifts. What’s AGI? AGI is your household income, your adjusted gross income. See how confusing that is? This is why I showed you that graphic. It’s just gonna paralyze some folks, because, what do you even make of that statement? I’m gonna unpack it for you so that you can unpack it for your donors.

Let’s say you are a joint household with an adjusted gross income of $400,000, and you give charitably. 0.5 percent times $400,000 is $2,000. That means that the first $2,000 this household gives each year is not tax deductible. So let’s say you give $5,000 annually in this household. The first $2,000 of that $5,000 is not tax deductible. You’re only getting a tax break, if you’re itemizing, for the remaining $3,000.

So here’s where you can step in and be a generosity guide for your donors, now that you know that is the big change for itemizing donors. I call this 0.5 percent a ding, and it happens every year. If you give charitably every single year, you’re gonna get dinged every single year.

Solution number one to turn this lemon into lemonade is to encourage your donors to bunch several years of nonprofit giving into one DAF gift, and then take those funds sitting in the DAF and give them charitably over several years. Because a DAF involves taking your deduction upfront, not every single year you distribute the funds, this will minimize the annual 0.5 percent ding.

This is a lot right here, so I’m gonna show you a diagram to explain my point. Again, we’re talking about a household that makes $400,000. They give, let’s say, $10,000 per year for four years. This could be one of your major donors. The first row is option one. They give $10,000 a year as they always have for four years to nonprofits. They hit the ding each and every year. You can see in column three, they’re sending out $10,000 every year to nonprofits, but that first $2,000 every year is not tax deductible. Over a four-year period, that means they get a tax deduction on $32,000 of it, all the way on the right, but they won’t get the tax deduction on $8,000 of it because of that 0.5 percent ding.

Alternatively, and this is what I’m suggesting to you as a generosity guide, for a household that gives very generously every year, guide them toward taking four years’ worth of giving and depositing it in a DAF. Again, yes, the first 0.5 percent, the first $2,000, is not tax deductible. But since the tax event only happens the year they put it in the DAF, not when they distribute it, the $2,000 only hits them in year one. You can see that in column four. In years two, three, and four, they’re distributing this money. They’re not coming across the ding, because they took their tax deduction in year one, and there’s no taxable event as they start to distribute it to nonprofits.

You can see that over the four years, what is deductible is $38,000, compared to the first example I showed you, which is $32,000. That’s $6,000 in savings that you get to keep instead of giving to the federal government. Beyond the $6,000 in tax savings, this strategy often helps people move into the itemization camp, because putting a lump sum of money in as charitable gifts adds to the column that you need to total up to see if it exceeds the standard deduction lump sum. It is also much less tax-time paperwork, because the only thing the IRS wants to see is your receipt that shows you’ve moved the money into the DAF. They don’t care about any of the receipts from the nonprofits, because the taxable event is connected to the DAF deposit.

What I love about this is that I opened up a DAF a few years ago. It tracks my giving history, so I can see year to year how much I’m giving and who I’m giving to, and that helps me decide when to give again and how much. Frankly, that’s good for nonprofits, because we all know many donors don’t keep track of whether they’ve missed a year or given more or less, and this helps the steady state of donations from some of your best donors. So I’m a huge fan of DAFs.

Solution number one is for people opening up a DAF. Solution number two is for people in your donor role who— Dani, I think there might be a question. I see your face.

Dani Cluff: Yes. I was just gonna see if you could clarify. Somebody added a comment: is what you’re explaining based on the assumption that the donor wouldn’t give any other donations, or to their DAF, in years two to four?

Sari McConnell: I’m giving you an extremely simple explanation so that you can see how putting money up front into a DAF saves you more money than distributing that same money each and every year. You can keep putting money into a DAF. There are added benefits if you do it in years two, three, and four, of course. But that would be a spreadsheet that I don’t think the folks on this webinar could probably follow. But yes, there are benefits to giving incrementally to a DAF. And you can also just give directly to a nonprofit and have a DAF. Just know that if you’re a $400,000 household, and by the way, don’t fixate on $400,000, you could be a $200,000 household. 0.5 percent of that is $1,000. So the first $1,000 for that household each year is not tax deductible. Hopefully, that’s clear.

Dani Cluff: Awesome. Thank you.

Sari McConnell: Okay. So solution number two. For all of you nonprofits who are thinking, “Wow, my donors are really aging, I need to bring in a lot of younger folks to our nonprofit,” well, if you have an aging donor roll, according to the changes in OBA, if you’re a generosity guide and know how to play this right, you have hit the jackpot. Donors who are aged 70½ have access now to the most tax-efficient way to give. How do they do that?

As I mentioned, at age 73, folks have to take an RMD from their IRA. See, now you know all these terms I’m throwing out. The RMD is taxed as ordinary income unless it’s gifted to charity as a QCD. If you’re 70½, you’re not making RMDs yet, but you can still give QCDs from your IRA, up to $111,000 per person. So if you have a lot of money sitting in your IRA, and some people do, they have access to quite substantial funds that aren’t sitting in their checking account but have been sitting in their IRA over a lifetime of savings and investing.

What I love about a qualified charitable distribution is that it is 100 percent tax deductible. There is no 0.5 percent ding, and you do not need to itemize. It’s pretty easy to do. The hardest thing for your donor to do is change their behavior and start doing it. I asked my broker at Schwab, who holds my IRA, “Let’s say I’m 70½ and I wanna give a QCD. How would I do that?” He said, “I’d give you a checkbook that’s specifically tied to your IRA, and you can write checks from it to your favorite nonprofits.” So the hardest thing is actually just changing your behavior and having the conversation with your financial adviser and perhaps your tax adviser. Then the actual doing of it, writing a check, is easy. Different institutions treat it differently. Sometimes you do need to make a phone call, or there’s a special screen you need to go to in your brokerage account, but it’s not that complicated. It’s the first time that feels odd. After that, it’s pretty intuitive.

So I’m giving you two really great reasons to call your donors, but more importantly, this is the type of call that they will call you back on. We all know as fundraisers how hard it is to get our donors on the phone or to return our calls. We now, as generosity guides, have some very important tax-smart guidance. And leaving a message, “I have a tax-smart giving tip you can act on right now. Let’s talk,” you’re gonna get that callback.

So you can start to see the advantages of becoming a generosity guide and not deferring the whole of it to a tax adviser to explain. If you delegate or abdicate the responsibility and hope that the tax adviser or the financial adviser gives them great information proactively and tells them to direct it to your nonprofit, you’re on a little bit of shaky ground. But if you can start having a conversation with your donors, and again, you start with “I’m not a tax adviser, but I’d like to tell you how some of our donors are now giving in light of the OBA law, because there are some changes to the tax deductibility, and I wanna share how they are doing it. What you need to do is ask your financial adviser or your tax adviser these questions.” You, as the generosity guide, get the ball rolling with these conversations. It deepens your relationship with your donor. And guess what? The funds will find their way back to your nonprofit because you initiated the conversation.

This is a big part of Donor Boom’s thought leadership, and it’s why the changes in the tax law are such a huge opportunity for nonprofit fundraisers. For itemizing donors, the new tax law creates loss. People will lose some of their tax deduction because of that 0.5 percent. When they sense that they’re going to be in a losing position, people are very loss averse. There’s a lot of behavioral economic research that shows loss aversion is a powerful enough force to get donors to change their behavior. This puts you in a very strong position to guide your donors to start giving from wealth, from their donor advised fund or their IRA, versus disposable income.

Professor James’ research talks about how giving from wealth is a much larger pool of funds, and it doesn’t compete with your child’s math tutor or your mortgage. You have a much larger pool of funds to work with, funds that are kind of ambiguously identified for how someone is going to use them in the future. Once you can get people to start giving from that pool of money, they are likely to be a lot more generous. But the challenge becomes, if you’re familiar with his work, how do we get people to start doing that? We’d love it if people started giving from their wealth. The tax law changes create a pain point for your donors who are itemizing, and the pain point is your leverage. You’re able to come in and say, “I can solve this problem for you. You may not even know you have a problem yet. Let me explain the problem you have.” People are gonna say, “Well, thank you so much for that information. That’s really great.” You’re gonna explain it in a very clear way, and then they’re gonna be able to regain most or all of their tax benefit loss, and you get the credit. Now you’ve got donors who are giving from wealth, and over the years, because they’re giving in that way, they are much more likely to give more generously to you. That’s the lemonade stand.

So for itemizers, being a generosity guide matters most. Donors are willing to change how they give to avoid losing the tax benefit, and it’s up to us as generosity guides to point out the sweet spot: if they can change their giving from disposable income to wealth, that is the optimal way to deal with the changes in the new tax code, and that is the most tax-smart way to give. Ultimately, giving from wealth leads to unlocking greater generosity.

Okay. There’s even more for generosity guides. I hope you’re all with me. Hopefully, I’m explaining this clearly enough. We’re gonna go even further on this, because there’s more. We’ve been talking about itemizing donors. If you remember that circle that was ripped in half early in my presentation, there were some concerns about people itemizing, because they’re gonna lose a tax break. The other half, the people taking the standard deduction, actually gain a tax break, and I wanna talk you through that and how you can use this to your advantage as well.

Starting this year, if you take the standard deduction, you can take what’s called an above-the-line tax deduction of $1,000 if you’re single, up to $2,000 if you’re married or filing jointly, for what you give to charity. So this is for folks who are taking the standard deduction. All of a sudden, they have a brand new tax break that they have never had before, and they’re pretty unaware that this is the case now. It’s gonna take a while for them to catch up to the fact that they can be giving larger sums of money and getting a great tax break for it. As a generosity guide, you should be telling them that they have this new benefit. Dani, do you have a question?

Dani Cluff: Yes. Before we move too far past those solutions you were just going over, we did get a question. Could you just confirm that solution number one that you laid out necessitates that donors take a year or multiple years off of making contributions to their DAF? And if so, is there data to show that donors are willing to do this?

Sari McConnell: Can you restate the first part of that question?

Dani Cluff: So looking at solution number one that you laid out, the DAF. Is that saying that it’s a necessity for donors to take a year or multiple years off of making contributions to their DAF?

Sari McConnell: No. They don’t have to stop giving. But it’s called bundling or bunching your donation. If you bunch more giving into one year, you will get a greater tax benefit. Hopefully, that’s clear. And this is so brand new. No, there is not research yet, because we’re just starting 2026. We’re gonna start to see changes in donor behavior at the end of the year, probably, when they’re trying to figure out their tax strategy. They have to complete the year in order to file their taxes. But I think it is logical enough, rational enough, for people to understand the math: if they put the money into the DAF and then distribute it over time, instead of just distributing it over time directly, that’s a better tax-saving strategy for them.

Okay. So I have a hot tip for you right now. We just entered 2026. In 2025, your folks who took the standard deduction did not have this new tax benefit that I just explained to you, the $1,000 or $2,000. My advice to you is that if you have donors who lapsed in 2025 but who were giving to you the year before, you contact them. You tell them they are the smartest donors in the world for not giving in 2025, even though you missed them. Because if they give right now, they’re now eligible for a brand new tax deduction that went into effect January 1.

How great of a phone call or an email is that for one of your donors to receive? You’re not saying, “Oh, you lapsed. Please come back to us.” Instead, you’re saying, “Smart move, donor, because last year you wouldn’t have gotten this tax deduction. That’s probably why you didn’t donate. This year, you can make the donation right now and get this deduction.” Tax tips are irresistible. They’re like stock tips. People love talking about this stuff, and they will be so excited to talk to you about it.

Let’s hit the pause button for a moment before we shift into corporate giving. How do you get on the road to being a generosity guide? You wanna educate yourself and your fundraising team on the tax terms and the changes. There’s gonna be a poll towards the end of this program that you can take if you wanna receive all the training materials from us. Those training materials really help you share this information and also solidify it in your mind, so make sure you click yes when we get to that poll.

Have thoughtful conversations with older donors about QCDs. I love to start off with the opening line, “You’re probably not old enough to take advantage of a qualified charitable distribution,” at which point your donor is gonna say, “You’re so sweet. What’s the tax tip?” Or, “I’m not old enough, but my spouse is,” or “Next year, I will be. Tell me more.” Or the third person will say, “Yep, you’re right, I’m not that age,” at which point you get to start talking to them about the DAF strategy.

Becoming a generosity guide also involves being pretty current with how DAFs work and underlining the fact that DAFs are affordable and make financial sense for almost everybody, and they’re a really efficient tool to make donations, with a lot less paperwork. You wanna be informing those non-itemizing donors about the $1,000 or $2,000 deduction. And above all, you can start and end with the line, “I am not a tax adviser. I’m a generosity guide. I can point you in the right direction. You should go talk to your tax adviser. You should go talk to your financial expert.”

What I like to underline here is that you are going to get a question that you do not know the answer to. Your job as a generosity guide is to know where your red line is and to say, “That’s a great question. I’m not a tax adviser. It’s probably something you should ask them.” Got it? So you can see the difference between being the generosity guide and sending people on their way to the experts with good questions that you’re planting in their minds, and then they come back to you with concrete answers that suit their needs.

Okay. Really quick, because I wanna make sure we have time for questions at the end. For those of you who rely on corporate giving, and I’m talking specifically about corporations, not S corps. S corps are more like professional services firms. I mean corporations who are your sponsors. There is a new ding for corporate giving also. It’s 1 percent, but it’s 1 percent of their adjusted taxable income, and this can be pretty significant. If you’re a Salesforce type of company and your adjusted taxable income is $500 million, the first $5 million of your charitable giving is not tax deductible. Their entire budget of charitable giving might be $5 million, so there might not be any tax break for them under this new tax law.

How do we handle this? Have the conversation with your corporate partners. Deepen your relationship. Work it out with your sponsors. Here’s how to do that. First of all, talk about the tax law with your sponsor and ask if they prefer to be invoiced as a marketing expense versus a charitable donation. If they take your sponsorship as a marketing expense, it is a tax deduction, because it’s an expense of their business. If they take it as a charitable donation, that’s suddenly in the bucket that is impacted by the 1 percent. Companies are working this out actively right now. It’s a super fluid situation, and every corporation is gonna deal with this differently, so it’s good to have a direct conversation about it. If you invoice them as a marketing expense, it’s very important, and it’s always important, to demonstrate and document the marketing value of the sponsorship so that it is seen as a legitimate marketing expense.

I don’t know if this is gonna be an opportunity or not, but I’ll throw it out there: you could pitch multiyear sponsorships, because that sort of bundles the giving. They pay you up front for five years of sponsorship, and they pay you in that one year. Again, it’s sort of like a DAF in years two through five. They’re not as exposed.

The thing I’d like to caution you on the most, because so many of us get lots of donations from employee matching, is that this 1 percent is going to impact employee matching gift policies. Matching is a very popular employee benefit, and it’s often how most corporations like to distribute their charitable giving, at the request of their employees. But it’s probably not going to be a tax deduction anymore for corporations, so that makes it vulnerable. Just keep an eye on that. There might be articles about this in the news. Companies have not figured this out yet.

So for your donors who are losing their tax benefits, or for your corporate sponsors, you have the ability, as a generosity guide, to bridge donors who are losing tax benefits to giving from wealth to regain some or all of those benefits. This is where we at Donor Boom are encouraging you, the fundraiser, to lead the conversation, not to defer it or ignore it, not to defer it to the tax world and the finance world. Surface it. Get your donors to start thinking about it, and then send them on their way with their questions to get answered by the experts. You don’t need to give tax advice, but you’re gonna be a much, much better fundraiser if you start using tax-smart giving tactics.

Donors are gonna love you for these tax tips. We always say we wanna show the impact of your funds, and that’s the reciprocal relationship between us and the donor. But by showing them that you’re also looking out for their welfare, I think that speaks volumes, and it builds trust and deepens their commitment to your organization.

I would also say that if you avoid the topic altogether, because you don’t wanna be bothered to learn all this stuff or it’s just not your bag, fine. But you are gonna miss a powerful revenue growth opportunity for your organization. And always, always, always recommend consulting a tax adviser. This is 100 percent win-win for your donors and win-win for your mission. I guarantee you that the authors of the OBA law had no idea what a gift they were handing to nonprofits, because on the surface, it looks like a bag of lemons to some extent, and we know how to turn it into lemonade.

I think I’ve covered this pretty clearly. I wanna make sure that I give enough time for questions. If you don’t mind, Dani, if you could put up the poll again for anyone that wants it. You’re gonna get a recording of this, of course, but for anyone that wants detailed training instructions on all these materials, we’d love to send them to you, along with a white paper on our thought leadership about becoming a generosity guide. By answering this poll, Dani will know who wants to hear from us to get those materials. If you’re listening to this as a recording, this poll is no longer live. You can email us at info@donorboom.com, and in the subject line, write “Bloomerang webinar” and request the training materials.

Alright, Dani. I see so many questions in the chat. I told Dani we have about seven minutes to the hour, but I am happy to stay on this call as long as people have questions, and I’m happy to answer all of them. You might find that I am modeling myself like a generosity guide. If you ask me a question and I don’t know the answer, I’m gonna tell you to talk to your tax adviser or your financial adviser. That’s the point. We don’t need to know all the answers, and that can be very vulnerable for us. But it’s a great strategy, actually. You increase the amount of trust with the person you’re talking to by not making it up, but sending them to someone who can give you a clear answer.

Dani Cluff: Fantastic. Well, we have a lot of questions, so even staying on, we may not have time to get through all of them today between the chat and the Q&A. I wanna start with something. I noticed there’s a bit of confusion in the chat about QCDs and whether or not they can be put into a DAF. Can you just clarify that one?

Sari McConnell: They cannot. I do know that. They just cannot. You have to move your QCD to a nonprofit.

Dani Cluff: Perfect. Let’s just jump in at the top. Do you know the percentage of Americans that typically take standard deductions versus itemizing?

Sari McConnell: I don’t. But this year, that’s gonna change anyway. Whatever the stats were before, they’re gonna be different this year, because many more people will itemize from those high-tax states, since they can now use more of their state and local taxes to exceed the standard deduction lump sum. We’re gonna see. I do know that in 2017, when Trump raised that lump sum standard deduction, a huge number of folks moved into the standard deduction camp. So now that’s gonna shift back.

Dani Cluff: Interesting. Okay. So we have a SALT deduction question. What if the AGI is more than $500K?

Sari McConnell: Then you do not have that benefit.

Dani Cluff: Okay. Perfect.

Sari McConnell: I’d explore it further with your tax adviser to see if you get a fractional benefit, or if you just don’t at all. Great question.

Dani Cluff: Let’s see. I’ll get past some of these QCD questions.

Sari McConnell: Hopefully, everybody has answered this poll. I’m gonna unshare so that I can see you all. And again, you can follow me on LinkedIn, Sari McConnell. There we are.

Dani Cluff: Here is another question for you. What if we have an inherited IRA, and as the descendants we’re required to take the RMDs over 10 years? Is switching to a sum from the IRA to a DAF also beneficial for $100,000 to $200,000 households?

Sari McConnell: I do love this. I have to tell you, Dani, this happens frequently when I talk about this topic. We’re all now thinking about our personal finances, because we’re donors too. We’re learning something for our own benefit, not just ourselves as fundraisers. Yes, this does impact inherited IRAs. I will say that. Beyond that, yes, you are correct. If you inherit an IRA, you are still required to take an RMD. I would talk to your tax adviser about whether, if you personally have inherited this and you’re not 70½ yet, you are allowed to take a QCD from it or not. I actually don’t know the answer to that question. I’d like to think the answer is yes, but I’m not sure. Talk to your tax adviser.

Dani Cluff: Great. Let’s see. Are DAF contributions earmarked at the time of donation, and can the donor redirect DAF donations?

Sari McConnell: Money in a DAF is restricted funds. It can only go to a nonprofit, and you are in charge of telling the organization that houses your DAF where you want the money to go, 100 percent. You’re basically requesting that a grant be made from your DAF to an organization. Most DAFs, you don’t even need to talk to a person. You go onto a screen, and it’s gonna look a lot like your checking account and bill pay. You put in the request, the name of the organization, and the tax ID number, and then it will get automatically sent from that fund by your brokerage account or whoever’s overseeing it.

Dani Cluff: With all that you shared today, do these changes also apply to tithes and offerings collected by a church?

Sari McConnell: If you take a tax deduction for the donations you make to your church, if you itemize them, yes. The interesting thing is you have to have a paper trail. If they’re passing the bowl around and you put $20 in there, there’s no paper trail for that. I remember my mother-in-law used to write a check before she went to church to put in the bowl, just so she’d have the paper trail, because she itemized. So yes, it does apply to that. If you’re taking the standard deduction, same thing. Now you’ve got that $1,000 or $2,000 benefit. You still need a paper trail to show Mr. IRS that you made it charitably. And religious institutions, all faiths, are nonprofits. So yeah.

Dani Cluff: Great. Is the half percent still deducted from the initial contribution to the DAF?

Sari McConnell: Yes. But it only happens that one year that you put the money in the DAF. As I said before, if you take four years of money and you put it in in year one, you only get dinged in year one, not every single year.

Dani Cluff: Perfect. Let’s see. Can donors who itemize under the age of 70 give from their wealth to avoid the half percent ding, and not give through a donor advised fund?

Sari McConnell: And not give through a donor advised fund. Is that what you’re saying? Let’s talk about what we mean by giving from wealth. Giving from wealth means noncash assets. It means your retirement account, your traditional IRA. It means a donor advised fund. It also means stock. Those are the three most popular ways. It also actually means property and cars. Those are noncash assets too. But really, we’re talking about DAFs, stock, and QCDs.

Let me think about this. A good example: you can liquidate money from your brokerage account and send the check to your nonprofit. You are still gonna get the ding because of how you just did it, because 0.5 percent of your household income that you give charitably is not eligible. If you instead transfer funds from your brokerage account into a DAF, and you don’t even need to liquidate it, now you get more of the benefit.

If you give stock to a nonprofit, and there’s a reason why I actually don’t mention this in the presentation, because I’ve given you so much and this is a little bit more, stock is giving from wealth, so that’s great. If somebody gives appreciated stock, and when we say stock, it could be mutual funds, ETFs. It’s not just Apple stock. Any type of these financial securities, bonds, Treasury bills, whatever. If you give appreciated securities, you do not have to pay the tax on the appreciation, the growth from when you bought the stock to when you are liquidating it. That’s why people like to donate stock. There is a big tax benefit right there that has nothing to do with your year-end taxable income. This is taxes you pay on buying and selling stock. It’s called capital gains tax. So if you are donating stock, you have the capital gains tax savings right there. But you’re not bunching it like you are with the donor advised fund, and it’s definitely not sitting in your IRA either. So you’re still exposed to that 0.5 percent ding.

This is very important: do not get in your own way when it comes to donations. If somebody wants to give you stock, let them give you stock. Don’t gum it up with “I can tell you about a side-door way you can move the stock into a donor advised fund, blah, blah, blah.” Do not do that. You are creating friction and paralysis for something that’s already working and is already tax-smart in its own way.

Dani Cluff: Absolutely. Let’s see. How does this impact us as a nonprofit for our 990 filing of revenue if we were to, for instance, invoice a sponsor for marketing expense versus the sponsorship donation?

Sari McConnell: You would have to ask your tax adviser.

Dani Cluff: Perfect. See? A lot of QCD questions that I think you’ve covered as we moved through that.

Sari McConnell: Sure.

Dani Cluff: And then let’s end on this clarifying question before we go. I know we’re a few minutes past already. This person just wanted to clarify, if they understand correctly, that DAF funds are not committed to your charity until they are physically paid out.

Sari McConnell: Yeah. Money that’s moved into a DAF stays in the DAF until it’s designated to you, the nonprofit. That’s correct. But I will tell you that as soon as someone starts donating to you from a DAF, you definitely wanna use your Bloomerang software to mark the gift type. You want to know that they have one, because in future conversations, first of all, you’ll know to be a little bit more ambitious about how much you ask for in future years, because they’re giving from wealth. But also, you can directly talk to them: “I know last year you gave to us from a DAF. Is that how you would like to donate today?” You still need to facilitate the ask. Once people start giving from a DAF, you still need to solicit their donation. But as soon as they start moving the funds from there, they are likely to keep donating from there in the future.

I do see somebody in the chat, Dani, who said that the poll is not available on your phone. If you didn’t get a chance to fill out that poll and wanna receive our training materials, email info@donorboom.com, and in the subject line, write “Bloomerang webinar” and make your request, and we will send it to you.

Dani Cluff: Perfect. And I’d be remiss not to mention, with all this talk about DAFs, there’s a great blog on the Bloomerang website about stewarding those DAFs that you are aware of before they are actually being paid out, to make sure you’re not losing out on that money later down the line. So definitely always be checking those educational resources, along with all of the content that Sari is providing for you and sending out.

Sari McConnell: Dani, I know I’m doing my job when somebody says that my presentation was succinct, because this is complicated. And if you walked away from this presentation thinking to yourself, “I think I got it,” I am very excited. I wanna encourage you: I didn’t learn this stuff in one presentation. I spent a lot of time thinking about it and talking and verbalizing it with other people. I talked to my tax adviser. I talked to my financial adviser. I kicked the tires on a lot of these ideas. This is part of your journey as a generosity guide that I encourage you to take as well.

Once you finish role-playing among your team, if you want good test cases to try out this approach, start with your board. They’re your most forgiving audience. They know you the best. They are likely to have a more in-depth conversation with you, and you can test where you feel your red line is. You can also test saying, “I don’t know. Ask your tax adviser,” and see how they respond. You’re not shattering glass. They’ll nod their head and go, “You’re right. This is a tax question.”

Dani Cluff: Well, perfect. Thank you so much for breaking this down. I, myself, as somebody who does not live in your world, took in a lot of information today, and my head is still reeling from everything you shared. So thank you for taking the time to put it together, as the attendee said, in a succinct way to help walk everyone through it. It’s incredible. Thank you so much.

Sari McConnell: Absolutely. Such a pleasure. And thank you, everyone, for joining us today. I know this is a big topic. Thank you for being willing to take it on and take in all this information, and it benefits you all in supporting your missions. Have a wonderful rest of your days. Bye, everyone.