Empower Your Faith: Embrace the new Charitable Giving Deduction
By Sarah Motiff, Converge Great Lakes Accountant
With the passage of HR 1, otherwise known as the One Big Beautiful Bill Act, there is significant news regarding charitable giving that could have an impact on contributions to churches. HR 1 introduces a new above-the-line charitable gift deduction starting with 2026 tax returns, encouraging more individuals to contribute to your ministry with added individual tax benefits. Individuals who typically take the standard tax deduction will also could deduct:
Up to $1,000 for single filers
Up to $2,000 for couples filing jointly
Your church may witness an uplifting response from the expanded low’ and middle’ income donors who do not itemize but wish to take advantage of the new individual tax benefit. To optimize this opportunity, consider improving how you communicate to your donors about the updated tax benefits of giving:
Giving Envelopes & Inserts: Information highlighting the new deduction with a QR code for additional details.
Bulletin & Newsletter Articles: Regular updates on stewardship and policy changes.
Website Pop-Ups: Link to our donation page with highlights of tax-saving benefits.
Social Media Posts: Countdown reminders for December giving, showcasing testimonies from our members.
Below are some examples of talking points to help your messages focus on encouraging your donors to embrace this new tax benefit:
New Tax Benefit: Even if you don’t itemize, you can deduct up to $1,000 ($2,000 for couples) starting in 2026!
Faith and Finance: Your generosity fuels ministry and reduces taxable income.
Importance of Receipts: Gifts of $250 or more require special tax-compliant receipts—our finance team is here to assist.
Every Gift Matters: This new law makes it easier to give generously, even with smaller gifts.
Pastor’s Message: Faith Meets Financial Wisdom - As we engage in generous giving, it’s heartening to see changes that recognize and reward our dedication. The new above-the-line deduction reinforces that every donation, regardless of size, contributes to advancing God’s work and can also ease your tax burden.
Don’t forget the importance of training staff and stewardship teams on concise “talking points” to reinforce tax-smart giving.
As you begin preparing for the 2026 fiscal year, your stewardship teams and financial leaders should update their revenue forecasts, cash-flow models, and expense budgets to reflect these changes. Below are some tips on how to incorporate the anticipated updates:
A 5–15% increase in annual donations as lower- and middle-income givers tap the new tax benefit.
Tag incoming contributions in accounting systems to separate “above-the-line” gifts for accurate forecasting.
Expect year-end spikes in December and another surge in April, driven by tax-planning deadlines.
Adjust expense schedules (e.g., mission support, facility maintenance) around these giving peaks.
Smooth out potential volatility by maintaining a 2 to 3-month cash reserve for operating expenses.
Allocate funds in your budget for updated giving envelopes, web banners, and newsletter inserts highlighting the deduction.
Plan a Q4 donor-education campaign (graphics, FAQs, testimony videos) with a $1,000–$2,500 budget.
Set aside a compliance reserve (1–2% of the annual budget) for legal or CPA reviews of your giving policies.
Build three budget scenarios:
Conservative: +5% revenue; +10% admin costs
Moderate: +10% revenue; +15% admin costs
Optimistic: +15% revenue; +20% admin costs
By proactively adjusting forecasts, building in new administrative costs, and scaling stewardship efforts, your church can harness the above-the-line deduction to strengthen both ministry impact and financial health.
In conclusion, the new above-the-line charitable giving deduction presents an exciting opportunity for your church to enhance its fundraising efforts and engage more donors than ever before. Embrace this change with proactive planning and strategic outreach and watch as your congregation comes together to support the important work you do.
Better Together,
Sarah Motiff
Accountant, Converge Great Lakes