Key topics covered in this article:

  • Charitable Giving Rules in 2026: New tax rules introduce a universal deduction for standard filers and new thresholds for itemizers and corporations, impacting donor behavior and nonprofit strategies.
  • Sector-Specific Trends: Museums, private schools, and social assistance organizations are adapting to funding cuts, inflation, and evolving donor expectations with digital tools and personalized engagement.
  • Strategic Nonprofit Actions: Nonprofits are focusing on donor retention, financial transparency, and digital engagement to build resilience and expand their impact in 2026.

Resilience will define the nonprofit sector in 2026. Organizations began 2025 in a difficult position, as several federal funding sources were cut with little warning. Many had to adjust quickly by finding new revenue or making operational changes. Even with that disruption, giving held steady in many areas, and most nonprofits now have a better read on their financial outlook for the year ahead.

The new charitable giving rules will add another variable. Donors will likely have questions about how the rules apply, and many nonprofits are preparing to explain the impact. The new deduction for standard filers may draw more small and mid-level donors into annual giving, creating opportunities to broaden engagement. This is shaping how organizations approach communication, donor support, and core operational efficiency in 2026.

Key Metrics & Market Trends

Nonprofits are watching several economic signals. Inflation remains elevated, with prices rising about 2.6–2.7% over the past year. Interest rates are easing but still higher than expected, keeping borrowing costs up and complicating capital plans.

There are encouraging signs as well. Strong stock market performance has supported major donor capacity and boosted foundation assets. Total charitable giving reached an estimated $592.5 billion in 2024, the highest level on record after adjusting for inflation, and current data suggests that 2025 totals will be comparable. Household income continues to rise, even as consumer sentiment has softened and donors express caution around inflation, employment, and the general cost of living.

Nonprofits are taking these trends into account as they plan for the year. Many are moving carefully on hiring and trimming spending where they can. Donors remain focused on impact and often look to nonprofits for information when making giving decisions. Volunteers remain an important source of support, with higher engagement being closely tied to higher levels of giving.

Starting in 2026, charitable giving will be treated differently for tax purposes under new rules. Standard deduction filers will be eligible for an above-the-line charitable deduction of up to $1,000 for single filers and $2,000 for joint filers. Itemizers will only be able to deduct contributions above 0.5% of adjusted gross income, and C corporations will need to give more than 1% of taxable income before any deduction applies. These changes are expected to affect when and how donors structure contributions, and nonprofits may be asked to help interpret the rules as donors plan their giving.

Sector-Specific Updates

Museums, Parks, & Zoos

The museums, historical sites, zoos, and parks market is projected to reach $115 billion in 2029, growing at a 4.8% compound annual rate. This is slightly lower than earlier forecasts mainly due to tariff-related cost increases for exhibit materials and equipment. Additionally, many organizations are still working through federal funding cuts and reimbursement delays, which have affected budgets and project planning, especially for smaller and local institutions.

This sector is finding success by creating more personalized experiences and digital programming. Many are investing in AI-based tools to enhance visitor engagement. Public-private partnerships are also becoming more common to make up for funding gaps.

Private Schools & Higher Education

Private K–12 schools report mixed enrollment trends. Lower birth rates are reducing the number of incoming students, and inflation is leading some families to reconsider private tuition. Even so, school choice programs are expanding, and secular private schools are increasingly popular among higher-income households.

Enrollment in higher education has stabilized, with year-over-year gains among undergraduate students. More students seem to be considering trade schools and community colleges. Interest in master’s degrees is still strong as graduates seek better job prospects in a competitive market. The new legislation may also affect some larger private universities, including a tiered endowment tax.

Membership Organizations

Associations and other membership nonprofits report steady revenue trends overall. Retention rates are strong across much of the sector, with renewal rates commonly in the mid-80% range. Engagement continues to depend on perceived value, relevant programming, and a consistent member experience.

Organizations are placing more emphasis on retention outreach and younger member recruitment, and many are finding success with expanded digital marketing efforts. Paid online advertising is growing, particularly among professional and trade associations, with LinkedIn being the most popular platform. Interest in new technology, including AI tools, is also increasing as organizations look for ways to personalize communication and rollout innovative member services.

Religious Organizations

Religious groups continue to receive the largest share of charitable giving, even as attendance has gradually declined over the past two decades. Congregations offering both in-person and online services tend to report stronger engagement than those relying solely on traditional models. The same is true for giving; congregations that offer online giving are seeing higher levels of participation.

Many faith-based organizations are also expanding outreach efforts, and they are seeing growing membership particularly with Millennials. This strategy may lead to more sustainable operations in the future.

Social Assistance Organizations

Social assistance nonprofits continue to see high demand for services, especially in housing and human services. Many are also managing staffing and funding challenges. Federal funding is still in question, even as needs grow.

Outreach to both individual donors will be critical; they make up nearly two-thirds of all giving to charitable organizations and are especially interested in donating to causes in their own communities. Business partnerships or fundraising events may also be avenues for revenue.

Strategic Takeaways

A few key actions are helping nonprofits prepare for a successful 2026:

  • Focus on donor relationships. Retention is just as important as recruitment; diversify revenue sources, including individuals, corporations, and new grant opportunities.
  • Be transparent about finances. Donors are interested in impact; clear reporting and communication can build trust and support donor decision-making.
  • Expand engagement opportunities. Volunteers are often strong contributors; offer more ways to get involved to strengthen donor support.
  • Invest in digital tools. This supports online giving, communication, connection, and program delivery. It’s also a valuable stewardship avenue.
  • Explain the new tax rules. The new tax rules related to charitable giving are likely to affect how and when donors give. Tailored messaging for each level of giving can help donors make informed choices.

Conclusion

Nonprofit leaders will continue to face challenges in 2026; however, many are well positioned to grow their impact. Strong financial planning and donor engagement remain central to building resilience. For questions about the new tax rules or funding trends, contact PBMares Not-for-Profit Partner Bo Garner.