SOME HOT TOPICS FOR NONPROFIT ORGANIZATIONS AS WE KICK OFF 2026

Big Beautiful….Donations?

It is estimated that approximately 90-91% of Americans do not itemize deductions on their annual tax returns, choosing instead to claim the standard deduction. Prior to the One Big Beautiful Bill Act that was signed in 2025, these taxpayers didn’t receive any additional tax benefit for making charitable donations.

Starting in the 2026 tax year, the ability for non-itemizers to claim a deduction for charitable contributions is being reinstated. The new limits are up to $1,000 for single filers and $2,000 for married couples filing jointly for cash gifts made directly to qualified charities.

Nonprofit organizations may need to “Get the word out” about these deductions. This can be done via a direct appeal strategy or possibly a new monthly program. For as little as $85 per month an individual can provide cash donations to the qualified charity of their choice and receive a tax deduction of $1,000 at year end. 

Does your organization have a plan to reach out to these new potential donors? 

 

Single Audit Threshold Change

With the single audit threshold increasing from $750,000 to $1,000,000 of federal expenses for fiscal years beginning on or after October 1, 2024, calendar year end organizations should immediately review their federal expenditures and grant agreements to determine how this change affects their audit requirements. 

Proactive tracking and documentation will help nonprofit organizations assess whether a single audit under the Uniform Guidance is required. Organizations should reach out to their auditors for assistance if questions arise. This change could save some organizations significant time and expense. 

 

Impact of Recent Fraud and Abuse Scandals 

One doesn’t have to turn on the news for very long before a story on recent fraud and abuse scandals happening throughout the United States is shown. These recent events have gotten the attention of the President, Congress, state legislation, and even social media influencers. These scandals expose major flaws in the distribution and management of federal funds, prompting heightened scrutiny across the nonprofit sector.

Legitimate charitable and nonprofit organizations may feel tougher requirements on grant applications or renewals. Certain donors may be hesitant to give large sums of cash to charitable organizations without first understanding the controls and management of those funds. Discoveries of fraud or abuse erode public and governmental support for nonprofit organizations as a whole. 

This is a good time for organizations to review their internal controls surrounding federal and state funding with an emphasis on cash management, supervision, and review of key control areas. By strengthening financial controls, diversifying funding sources, enhancing transparency, and encouraging board oversight, nonprofits will be in a stronger position to handle any possible changes with regulations related to these issues.