Controversial changes to federal tax policy passed by Congress last year—particularly changes impacting charitable giving—have only further fueled confusion regarding what these reforms truly mean for the average American. In 2026, these changes will decisively shape the landscape of charitable giving—but awareness of these changes among individual donors remains low.
New tax code changes are often under communicated to low-income Americans, leaving them unable to fully utilize new deductions and tax benefits. This confusion disproportionately impacts racial minorities and low- and middle-income families, who may struggle to access resources to help them understand how these reforms—particularly those related to charitable giving—affect their finances and offer potential benefits. This then raises the question: what does charitable giving mean to low- and middle-income minority communities? And how will recent changes to federal charitable tax policy—and confusion around those changes—impact the giving patterns of these communities?
While large-dollar donors can rely on wealth advisors and tax professionals to keep them up-to-date on the latest policy changes, small dollar, individual donors are often left with limited insight into the changing tax landscape—a problem that is especially acute for filers from financially disadvantaged communities. Low-income and racial minority donors are often forced to navigate overly complex and convoluted tax language on their own, leading to uncertainty about the true impact of their contributions. For nearly two decades, Black Americans—who hold the lowest average wealth among minority groups—have donated the greatest percentage of their wealth (3%-4% on average) compared to other minority groups. But as a result of the gatekeeping of policy knowledge, they do not receive the corresponding benefits that wealthier, white Americans enjoy.
A recent report from the Indiana University Lilly Family School of Philanthropy, drawing on findings from their 2020 U.S. National Household Survey in their Everyday Donors of Color report, highlights distinct giving patterns among racial and ethnic minorities. Individuals identifying as Black, Hispanic, Asian, and American Indian report charitable contribution rates ranging from 65–71% in the early 2020s. Their giving also extends beyond monetary donations: 53% of donors of color volunteered in 2020, 34% donated blood, and 70% donated goods. These contributions are directed primarily toward four key types of organizations—houses of worship and religious groups, universities and education-related institutions, civil rights and arts organizations, and ethnic financial institutions.
Correspondingly, where donors of color get information about tax policy and its changes to giving incentives is shaped less by national institutions and more by conversations within their immediate networks: community members, grassroots organizers, and local nonprofits that translate policy shifts into community-specific terms. As reliance on traditional philanthropic institutions, government offices, and mainstream information channels declines due to growing public distrust, these localized and relationship-based sources have been central to how minority donors navigate giving decisions and understanding the implications of tax changes.
As a result of cost, lack of workplace accommodation, and geographical distance, many low-income communities face restricted access to trusted sources of financial information like professional financial advisors and resource centers. The erosion of public trust in news media further restricts sources of public policy information for these communities: in a 2025 survey, only 28% of Americans reported having a fair amount of trust in news outlets. Instead, members of these communities turn to social media or seek out community resources to decipher how they are affected by tax policy changes.
Without accessible explanations or assistance in interpreting these complex rule changes, many donors are left confused about how their donation will be used or if their donation will even matter. In Fidelity Charitable’s 2016 report, “Overcoming Barriers to Giving”, researchers showed that 48% of Americans express serious concern about how nonprofits use donations. This demonstrates a widening trust gap between individuals and the charitable sector.
Consequently, gatekeeping of information is increasingly undermining the ability to sustain a culture of giving among racial and income minorities. The absence of clear and fair information about policy changes severely erodes public trust. This lack of transparency alienates individual donors, creating a deep disconnection from the very charitable systems designed to encourage their participation and empowerment. When details are obscured, people lose faith in the system’s ability to genuinely serve them.
During the summer of 2025, one of the most significant shifts in charitable giving began to take shape—one that will fundamentally alter how giving occurs and who can participate in it, reshaping both the mechanisms of giving and the collective knowledge that informs it. With more than one-third of all charitable contributions traditionally made in the final three months of the year, the stakes of this shift are particularly high. The One Big Beautiful Bill, among other major legislative efforts, represents a political and structural attempt to redesign the giving framework. Yet, as policy conversations and reforms continue to unfold within exclusive economic and political circles, the communities most impacted by these changes remain excluded—spoken about but rarely spoken to.
For communities already marginalized by income inequality and systemic barriers, this disconnect widens the existing knowledge gap surrounding charitable participation. Understanding how to give and how those contributions are valued under new laws has become increasingly opaque, risky, and out of reach. These barriers do more than limit participation; they erode confidence and ownership in the act of giving itself. Over time, this dynamic will breed inequity, rendering those closest to social need with the least access to the systems meant to uplift them. Blackbaud’s 2015 Diversity of Giving report highlights the stark reality that without deliberate and transparent efforts to “expand and share accessible information and connect community-based outreach and services”, the charitable sector risks silencing the very voices it claims to serve—further distancing marginalized donors from shaping and sustaining the collective generosity that underpins civil society.
Chelsea Taylor is Government Relations Intern at Independent Sector.
