Philanthropy In 2025: Trends, Opportunities, And Strategic Shifts–A Mid-Year Recast

Created By: CJ Orr
Updated May 30, 2025

At the end of 2024, I pulled together several predictions for 2025 as they relate to the philanthropic sector. As we approach the halfway point in the year, and given the amount of change we’ve experienced in Q1, I’ve provided a recast of my predictions below. While some have been impacted by economic and political turmoil, many of them remain true to this day.

Philanthropic Reorganization: Giving is Strong in Certain Revenue Streams and Sectors, Weak in Others

My outlook for philanthropic giving in 2025 was optimistic at the start of the year. However, unforeseen political developments have introduced significant volatility. Here’s the quick breakdown of where we’re seeing movement in the industry:

📈 Individuals and Major Gifts. The market was shaky for a few months with tariff uncertainty, but markets have rebounded; individuals and UHNW are back to giving strongly.

📈Foundations have stepped up, but the new tax bill might stymy their long-term giving capacity. The new proposed “big, beautiful bill” would impose higher taxes on private foundation gains, potentially reducing overall giving. Estimates suggest that the Endowment and Foundation tax will generate $50B annually, effectively pulling that amount from the roughly $500B contributed each year through private philanthropy. If passed (and I believe it will), this bill would mark a major shift in how foundations and endowments are taxed.

🔍 Corporates. Companies, while performing well this year, are adjusting their giving habits by giving to more conservative or risk-free causes. There has been a marked shift away from social justice or anything that clashes with the administration’s agenda.

📉 Federal Funding. I think it’s pretty clear that organizations should be planning for the loss of federal funding, particularly those that don’t align with the new administration’s agenda. We’ll likely continue to see this pulled back over the next four years.

📈 Causes that align with the government agenda or don’t compete with the new priorities are having a good year. Examples include: Veterans and Military Services, Religious and Faith-Based Institutions, Health and Mental Health Services, and Disaster Relief.

📉 Causes that don’t align with the government agenda are losing federal funding and potentially losing risk-averse philanthropists. Examples include: DEI initiatives, Climate-Focused Orgs, Public Media, Arts, Culture and Humanities Institutions, International Aid, and Higher Education. The next few years will pose fundraising challenges. Some organizations might also receive relief from the private/individual sector.

Despite these headwinds, history offers promise. The market has already rebalanced and recovered. In 2018, similar tariff-induced market downturns recovered quickly. Nonprofits will just have to remain agile and prepared to adapt their strategies as these fluctuations continue.

Overall, societal motivations will continue to play a significant role in philanthropy’s growth. As we’ve seen in the past, changes in the broader political environment often inspire individuals and organizations to give more generously. Nonprofits should be ready to capitalize on this moment by amplifying their fundraising efforts and making bold asks.

For Those Who Are Unscathed, Now is the Perfect Time for Campaigns and Major Fundraising Initiatives

If your organization is in the clear of the government fray and has been waiting for the right time to launch a campaign or a significant fundraising initiative, the right time is now–especially given the increased reliance on individual giving to make up for other funding losses. Several factors signal a green light for aggressive fundraising in 2025:

1. Economic Indicators: Rising consumer confidence and stabilized inflation mean more disposable income for giving.
2. Stock Market Strength: A strong stock market often correlates with increased giving, especially among wealthier donors who benefit from appreciating assets. 
3. Tax Policies Currently and in the Future: Current tax laws incentivize giving, making it easier for donors to support nonprofits while reducing their tax burden.
4. Generation Transfer: We’re in the middle of the Great Wealth Transfer, and planned giving is a major part of any campaign. 
5. Major Gifts: They are on the rise, and a campaign is reliant on major gifts to be successful. 

Organizations that move decisively will be well-positioned to secure transformational gifts. Building urgency and making a compelling case for support will be critical.

Return of Mid- and Lower-Level Donors: Low Inflation and Tax Incentives

While major donors continue to play a vital role in driving philanthropic growth, 2025 offers an opportunity to re-engage mid- and lower-level donors. Inflation’s leveling off has allowed for a growth in disposable income, making it easier for average donors to contribute again. That being said, today’s environment will require a thoughtful and nuanced approach. Ensure that your messaging acknowledges current challenges and highlights the tangible impact of their contributions to resonate more effectively with donors who are carefully considering their spending decisions during this time.

The proposed tax bill could further incentivize this donor segment. Section 111130 would allow those taking the standard deduction to also deduct $150 for single filers or $300 for married couples filing jointly. If passed, this provision could provide a meaningful boost to mid- and lower-level giving.

Leveraging AI and Automation for Fundraising Success

The rise of AI and automation is continuing to revolutionize the nonprofit sector, and really the entire economy. These technologies will continue to drive a productivity boom, enabling organizations to work smarter, not harder. AI-powered tools can enhance donor prospecting, streamline communications, and optimize fundraising strategies, freeing up staff to focus on high-impact activities.

Here are some of our top recommended AI tools: LLMs (ChatGPT), Grammarly, Version2, Copilot, Gamma, Zapier or Make, DonorSearchAI.

The Decline of Corporate DEI Commitments

In recent months, corporate giving to DEI initiatives has declined, influenced by mounting legal pressures and evolving political landscapes, including instances like the Fearless Fund case and changes to affirmative action laws. Given this reality, nonprofits with DEI-focused programs may find it valuable to diversify their revenue streams to sustain and grow their work. While corporate partnerships remain important, there is a significant opportunity to engage individual donors, who continue to represent the vast majority of philanthropic giving. According to Giving USA, individuals contributed 67% of all charitable donations in 2023, compared to just 7% from corporations.  By building strong relationships and crafting narratives that speak to personal values, organizations can help fill the gap left by declining corporate support and continue driving progress on DEI.

Expect Work Life Culture to Change at Nonprofits and Businesses at Large

The new administration has introduced policies that place less emphasis on work-life balance, remote work, and DEI-centered business practices. As workplace norms evolve, Orr Group is committed to helping organizations navigate these changes thoughtfully and effectively. We understand the importance of maintaining inclusive, equitable, and flexible environments—principles that drive both organizational success and mission alignment. By starting to reassess strategies now, nonprofits can better prepare to adapt to shifting trends and external pressures while staying true to their values.

Employment and The Search for Talent

The Fed will always prioritize maximizing employment, aiming to maintain the unemployment rate around 4%. The job market for top talent has remained competitive into 2025, with many government employees now looking for alternative employment as a result of department cuts carried out by the new administration. To stand out, organizations must develop a compelling Employee Value Proposition (EVP) that highlights their values, benefit offerings, work environment, and culture. By focusing on what makes your organization unique, you can better attract and retain the right talent.

Orr Group has found that producing a tailored EVP in advance of searches is one of the most effective methods for navigating this competitive landscape, helping organizations connect with candidates who align with their mission and needs. Whether partnering with a search firm or building in-house capacity, creating a strong EVP is critical to success in today’s job market.

Major Gifts and Planned Giving: The Cornerstones of 2025

In philanthropy, the Pareto Principle remains as relevant as ever: 80% of your results (gifts) will come from 20% of your efforts (donors). Major and planned gifts continue to be pivotal to nonprofit sustainability, as underscored by the current economic and political climate. Nonprofits should focus their resources on cultivating high-net-worth individuals who can make transformational gifts, especially during this time of urgent need.

At the same time, planned giving represents a massive opportunity. The ongoing Great Wealth Transfer—expected to exceed $84 trillion over the next two decades—will continue to reshape the philanthropic landscape. Baby Boomers, many of whom are passionate about legacy giving, are passing their wealth and values to the next generation. Nonprofits should continue to invest in planned giving programs that educate donors about the benefits of including charitable gifts in their estates.

The Power of Donor-Advised Funds (DAFs)

Donor-advised funds (DAFs) remain a growing force in philanthropy. Recent statistics show that over $250 billion is currently sitting in DAFs, awaiting distribution to charitable causes. Nonprofits must develop strategies to access these funds, often requiring proactive donor engagement.

A common question from organizations is, “How do we encourage donors to disburse funds from their DAFs?” The answer lies in creating a sense of urgency. Communicate their gift’s immediate impact and demonstrate how their money can be put to work today to achieve meaningful results. Personalized appeals and clear examples of impact will be key to unlocking this vital funding source.

Conclusion

Despite the turbulence that 2025 has brought thus far, and depending on their revenue model and mission, nonprofits can remain grounded by focusing on what works. Prioritizing major gifts, planned giving, and re-engaging mid-level donors can help build a more sustainable pipeline for long-term growth. At the same time, exploring tools like AI and leveraging donor-advised funds can support greater efficiency and impact. As the philanthropic landscape continues to shift, staying proactive and open to opportunity will be key to navigating change and advancing mission-driven work.

Orr Group’s unique approach involves applying a business mindset and understanding of current and anticipated philanthropy trends to design successful and sustainable fundraising strategies. Get in touch with us today to learn how we can help you raise more money effectively.

CJ Orr is the Chief Executive Officer of Orr Group. As an expert project and relationship manager with 10+ years of experience in the sector, CJ utilizes data, technology, and financially-backed trends to execute on the development of strategies and tactics to drive effective fundraising plans that meet or exceed targets.