{"id":74099,"date":"2025-12-02T14:06:04","date_gmt":"2025-12-02T19:06:04","guid":{"rendered":"https:\/\/www.nonprofitpro.com\/?post_type=article&p=74099"},"modified":"2025-12-03T15:50:27","modified_gmt":"2025-12-03T20:50:27","slug":"5-changes-driving-fundraising-in-2025-and-beyond","status":"publish","type":"article","link":"https:\/\/www.nonprofitpro.com\/article\/5-changes-driving-fundraising-in-2025-and-beyond\/","title":{"rendered":"5 Changes Driving Fundraising in 2025 and Beyond"},"content":{"rendered":"

Nonprofit leaders are navigating one of the most volatile — and opportunity-filled — fundraising environments the sector has ever seen. But it can be hard to step back from day-to-day demands and see the bigger forces driving change.<\/span><\/p>\n

In Monday’s opening keynote for NonProfit POWER, Erik J. Daubert, a nonprofit management specialist with the <\/span>Indiana University Lilly Family School of Philanthropy<\/span><\/a>, drew on current research and tax policy changes to explain what’s shaping philanthropy right now and what it means for nonprofit leaders.<\/span><\/p>\n

From the explosive rise of artificial intelligence (AI) to new tax policy and evolving generational giving patterns, his message was clear: Fundraisers will need to adapt quickly — and strategically. Here are five major forces he highlighted and what they mean for your organization.<\/span><\/p>\n

1. The Economy Is Rewriting Donor Behavior<\/span><\/h2>\n

Philanthropy tends to move with the broader economy. Analyses of recent decades show that charitable giving patterns track closely with the S&P 500. Stock market surges typically drive increased charitable contributions, while downturns trigger immediate and often significant declines.<\/span><\/p>\n

Today’s economic picture, however, is more complicated. Daubert described a K-shaped economy in which one segment of Americans is living paycheck to paycheck while wealthier individuals are thriving.<\/span><\/p>\n

That divergence matters for fundraising. Households at the top of the “K” have experienced dramatic asset growth through rising home values and stock portfolios. <\/span>Private foundations alone now hold about $1.7 trillion in assets<\/span><\/a>, positioning them for increased grantmaking due to 12-quarter rolling averages that dictate payout levels. Meanwhile, lower- and middle-income households face financial stress that can limit their capacity to give.<\/span><\/p>\n

Despite this unevenness, Daubert shared that working-class Americans give a higher percentage of their income than wealthy individuals. So, ensure an understanding of both parts of the “K” and cultivate donors across the spectrum.<\/span><\/p>\n

“This is why your cause matters so much,” he said. “This is why telling your story matters so much. This is why getting your message out in the community is so important. This is why sharing about the good work that you’re doing and making your donors the hero and center of that story is so important.”<\/span><\/p>\n

2. A New Era for Small-Dollar Donors<\/span><\/h2>\n

One of Daubert’s biggest points of enthusiasm centered on <\/span>universal charitable deduction<\/span><\/a>, now set to return and become permanent under the federal “One Big Beautiful Bill” tax package. Beginning in 2026, taxpayers who take the standard deduction will be able to deduct up to $1,000 (individuals) or $2,000 (married couples filing jointly) in charitable contributions.\u00a0<\/span><\/p>\n

Previously, only itemizers could claim a tax benefit for their giving. Daubert believes this new tax deduction will help usher in “the year of the small donor.”<\/span><\/p>\n

“I’m thrilled about this, because for the first time in American history, outside of a couple years during COVID for emergency measures, every American gets a tax deduction for their giving,” he said. “So if you think about the little old lady who gives $40 in the church collection plate, she’s never gotten a tax deduction before.”<\/span><\/p>\n

So, why does this matter so much? Small donors are often the pipeline to major gifts. Daubert cited <\/span>research showing that many million-dollar donors begin their giving journey with contributions of $500 or less<\/span><\/a>, often a decade before they make transformative gifts.<\/span><\/p>\n

Additionally, during the pandemic-era temporary universal charitable deduction, <\/span>IRS data show the volume of small gifts surged<\/span><\/a>. As a result, Daubert estimates the new tax law could add approximately $20 billion to the sector in the first year alone. But this will only happen if nonprofits are ready to meet and cultivate these small donors. That means reinvesting in community-based fundraising, making it easy for everyday supporters to give recurring gifts, and stewarding small-gift donors to build the long-term loyalty that sustains organizations.<\/span><\/p>\n

3. Generational Giving Is Shifting Fast<\/span><\/h2>\n

While baby boomers still represent the largest share of total giving, Daubert emphasized that millennials are now “adulting” — and quickly becoming a powerhouse donor class. They <\/span>give an average of more than $1,600 per household<\/span><\/a>, surpassing Generation X and trailing only baby boomers.<\/span><\/p>\n

He also dispelled several persistent myths:<\/span><\/p>\n