Say what? The tax laws changed?

If it feels like donor behavior has been a bit unpredictable lately, you are not imagining it. For many nonprofits in Kitsap County, the past year has brought a mix of signals: continued generosity in some areas, hesitation in others, and a growing sense that something is shifting. Part of that shift is economic. But part of it is something more subtle: many donors are just now waking up to changes in the tax landscape that have been developing for some time.

At Kitsap Community Foundation, we have observed these trends closely. Indeed, tax law changes have altered the incentives that once played a larger role in charitable giving. While attorneys, CPAs, and financial advisors have been tracking these developments closely, many donors are only now beginning to connect the dots. This realization often happens after going through the recent tax season and seeing the impact firsthand.

For nonprofits, this creates both a challenge and an opportunity. We want to help you navigate this transition so that your mission remains well-funded and your donors feel empowered in their giving.

The challenge is that some donors may pause. When people feel uncertain about their financial situation, the economy, or how tax rules affect their giving, they tend to slow down and reassess. This can show up as smaller gifts, delayed decisions, or shifts away from larger commitments. In some cases, donors who previously relied on tax incentives may reconsider how much or how often they give.

Turning Uncertainty into Strategic Conversation

The opportunity is just as important as the challenge. Moments like this create a natural opening for conversation. As the months pass by, donors are paying more attention. They are asking questions. And they are more open than usual to thinking strategically about how their giving fits into their overall financial picture.

This is where you can take action. As a nonprofit leader, you are in a unique position to guide your supporters toward smarter ways of giving that benefit both them and your organization. Here are three key points to keep in mind as you navigate these waters.

1. Recognize the Diversity of Donor Reactions

First, it is important to recognize that not all donors are reacting in the same way. Some may be pulling back, while others are leaning in, especially those focused on long-term impact or those who see increased community needs during uncertain times. The key is to stay engaged across your entire donor base, rather than assuming a single trend applies to everyone.

2. Communication Matters More Than Ever

Second, communication matters more than ever. If donors are just now becoming aware of how tax changes affect their giving, they may be looking for guidance, even if they don't say it directly. While nonprofits should never provide tax advice, you can play an important role by helping donors understand that options are available and encouraging them to talk with their tax advisors.

Simple reminders, such as opportunities with gifts of appreciated assets or Qualified Charitable Distributions (QCDs), can prompt donors to have conversations with their advisors and keep charitable giving on track to support your organization. For donors who are over 70.5 years old, a QCD remains one of the most tax-efficient ways to give, as it satisfies their Required Minimum Distribution without adding to their taxable income.

3. Emphasize Purpose Over Mechanics

Third, this is a moment to emphasize purpose over mechanics. Tax incentives may influence timing, but they are rarely the primary reason people give. Donors give because they care about outcomes, about people, and about the future of our communities.

When uncertainty increases, returning to that core message – your mission, your impact, and the difference donors make – can help anchor relationships and maintain momentum. Share the stories of the lives you have touched in Kitsap County. Remind them why they fell in love with your cause in the first place. When the "why" is strong enough, the "how" becomes a secondary puzzle to solve together.

Flexible Giving Strategies for a New Era of Tax Laws

At the same time, it is important to make giving as easy and flexible as possible. For example, some donors may want to "bunch" gifts. This involves making two or three years' worth of charitable contributions in a single calendar year to exceed the standard deduction threshold, then taking the standard deduction in the following years.

Others may shift toward more strategic approaches, such as using donor-advised funds or making multi-year commitments. A donor-advised fund at KCF allows a donor to make a large contribution during a high-income year (or a "bunching" year), receive an immediate tax deduction, and then recommend grants to your nonprofit over time. This provides your organization with a predictable stream of support even during "off" tax years for the donor.

Nonprofits that are prepared for this flexibility, and that communicate clearly about how to give, will be better positioned to retain and grow support. In this area in particular, Kitsap Community Foundation can help. Here is how:

• We will continue to keep you informed: We track charitable giving trends and tax law developments that may impact the way donors work with you. You don't have to be a tax expert because we are here to provide the context you need.

• We encourage you to share these updates: We provide resources and information that you can easily pass along to your board and your supporters.

• We encourage you to become a "broken record": You may be tired of hearing about tax law changes, but your donors will appreciate the repetition. They are not always paying attention, and when they do, they will be grateful for our collective efforts to keep them informed and engaged.

Let’s Connect Soon

The tax laws may change, and economic cycles will come and go, but the needs in our community and the heart of our donors remain constant. By being proactive and providing clear, mission-focused communication, you can turn this period of tax uncertainty into a period of deep, strategic connection with your supporters.

We appreciate the opportunity to work with so many nonprofit organizations that are improving the quality of life in our community every single day. Thank you for your partnership and for everything you do to make the Kitsap Peninsula a wonderful place to live. Let's keep talking, keep sharing, and keep building a stronger Kitsap together.