Preparing for Major Shifts in Corporate Giving
Corporate giving is entering a period of disruption. Recent federal tax changes, including the introduction of a 1 percent “floor” on corporate charitable deductions, signal a meaningful shift in how companies will approach philanthropy. For nonprofits, this is not a moment to wait and see. It’s a moment to prepare, adjust, and diversify. The organizations that respond proactively will be in a stronger position as these changes take hold.
For decades, corporate giving operated under a straightforward structure: companies could deduct their first dollar of charitable giving. That predictability shaped budgets, grant cycles, and expectations across the nonprofit sector. The new rules disrupt that framework. Beginning in 2026, corporations must give at least 1 percent of taxable profits before any charitable deductions apply. For some of the largest companies, this may not change behavior dramatically.
But for mid-sized and smaller companies—the ones that often support local organizations, community nonprofits, and independent schools—the cost of giving has effectively increased.
Economic behavior tends to follow incentives. When the tax value of donations decreases, companies reassess where philanthropic dollars fit relative to other priorities. As a result, analysts expect a sizable decline in corporate giving overall. The potential drop, estimated in the billions, would represent one of the steepest single-year declines in corporate philanthropy in recent history. Nonprofits that rely on annual corporate contributions, sponsorships, or event support may feel the pressure first.
This moment calls for nonprofits to think differently. While giving may shift, companies are not abandoning community engagement. The method of engagement is changing. Instead of traditional philanthropic gifts, companies may pivot toward partnerships that deliver mutual benefit. This may include contracts for services, workforce development programs, sponsorships tied to brand visibility, or support aligned with environmental, social, and governance priorities.
Nonprofits should begin preparing now by reassessing their revenue mix. Understanding how much of your budget depends on corporate support—and identifying the specific companies behind that support—is the first step. Not every corporate partner will respond the same way, and not every gift will be at risk. However, stress-testing budgets with conservative assumptions can help organizations anticipate where gaps may appear.
At the same time, nonprofits need to deepen their relationships with corporate partners. This is not the year for passive engagement or generic grant proposals. Proactive conversations about shared goals, workforce needs, brand alignment, and community priorities can uncover opportunities that go beyond traditional giving. Many companies will still invest in communities, but they will do so in ways that reinforce corporate objectives. Nonprofits that understand those objectives—and can articulate how their mission advances them—will be better positioned.
Diversification also matters. With corporate giving becoming less predictable, nonprofits should increase focus on individual donors, families, and foundations. This doesn’t mean abandoning corporate giving, but rather strengthening the broader philanthropic base. Multi-year commitments, planned gifts, alumni outreach, and improved stewardship all help reduce vulnerability to shifts in corporate behavior.
Finally, nonprofits should revisit how they demonstrate impact. As the tax incentive weakens, the business case for giving becomes more important. Clear outcomes, measurable results, and strong storytelling will be essential. Corporate partners will invest where they see value—whether that value is in community improvement, reputation, employee engagement, or economic impact.
Corporate philanthropy is changing. Nonprofits that adapt early, communicate clearly, and build diversified revenue strategies will navigate this transition with resilience. Those that wait may find themselves playing catch-up in a more competitive, constrained environment. The time to prepare is now.
