Strategic Corporate Giving in a Changing Tax Landscape
At Greater Houston Community Foundation, we work closely with business leaders and owners to design philanthropic strategies that deliver measurable impact for both the community and the organization. Thoughtful corporate giving is not simply charitable—it’s strategic, enhancing your company’s reputation, engaging your workforce, and aligning with broader financial objectives.
As you consider your giving plans, it’s important to understand key changes coming to corporate charitable deductions and how they may influence your strategy:
The 1% “Floor” on Deductibility—Effective 2026
Starting next year, corporations can only deduct charitable contributions that exceed 1% of their taxable income. Contributions below that threshold will no longer qualify for a deduction. For instance, a company with $100 million in taxable income must contribute more than $1 million before any deduction applies—and only the excess is deductible. While this may appear restrictive, proactive planning offers an opportunity to optimize both tax efficiency and philanthropic impact.
Navigating the 10% Ceiling Simultaneously
The IRS’s existing 10% deduction ceiling remains in place. Starting in 2026, both the floor and ceiling will apply together, meaning only amounts above the floor and below the ceiling are deductible. Disallowed contributions can be carried forward for up to five years—but only with careful planning to ensure full utilization of future deductions.
Timing and Strategy Matter
Now is the time to evaluate your corporate giving strategy. Consider leveraging a corporate donor advised fund at the Community Foundation to maximize deductions for 2025 and establish a long-term philanthropic platform. Strategic timing and fund structuring can preserve both financial and social impact, aligning your giving with corporate priorities and community needs.
Sponsorships: A Strategic Tool
Corporate sponsorships of charitable events or programs remain deductible as marketing expenses when they generate identifiable business benefits, such as brand exposure or stakeholder engagement. Structured correctly, sponsorships allow your company to advance both business and social objectives concurrently.
To comply with IRS regulations and avoid potential tax penalties, Greater Houston Community Foundation will not approve distributions from a donor advised fund (DAF) that are intended to cover any part of a contribution resulting in more than a minor benefit to the donor. This includes things like sponsoring gala tables, purchasing event tickets, registering for races, bidding on auction items, museum memberships, and similar activities. Simply put, DAFs cannot be used to pay for gifts that provide the donor or advisor with personal benefits they wouldn’t otherwise receive.
Continue reading: Understanding the Changes in Bifurcated Gifts
How to Get into Corporate Philanthropy: Corporate Giving Options
Corporate giving programs can take many shapes, so it’s essential to design a program that aligns with your company’s goals, values, and resources. Collaborating with an experienced team of philanthropic advisors is the most effective way to create a program that delivers meaningful community impact while supporting your business objectives. Here are some commonly successful approaches to consider:
Corporate Donor Advised Funds
A corporate donor advised fund (DAF) functions like a corporate foundation, enabling executives to streamline philanthropic efforts within a convenient 501(c)(3)-qualified framework, without the time and expense of establishing a separate foundation.
By contributing annually, especially in prosperous years, companies can consolidate donations to a variety of nonprofits through a centralized funding source. This approach ensures consistent giving, even during economic fluctuations.
Many companies also partner with the Community Foundation to offer donor advised funds to employees. These programs simplify charitable giving, allow contributions such as company stock, and provide access to the Community Foundation’s extensive resources. The result is higher employee engagement in community initiatives and stronger alignment between corporate success and social impact.
Corporate Employee Giving Programs
An employee giving program is a workplace initiative that empowers employees to support charitable causes in a coordinated way, often enhanced by company matching gifts or other support. These programs provide a clear, structured pathway for employees to give back, turning individual generosity into collective impact. By leveraging the company’s resources, networks, and matching opportunities, employee giving programs not only maximize charitable contributions but also strengthen workplace culture and community connections.
Corporate Scholarship Funds
Scholarship funds allow companies to invest in education and support hardworking students. By establishing a scholarship program, your organization can provide transformative opportunities that shape future generations. The Community Foundation manages all aspects of application and award processing, ensuring compliance with IRS regulations.
Disaster Relief Funds
In addition to donor advised funds and scholarship funds, the Community Foundation helps companies support employees in times of need through employee disaster relief funds. These funds provide emergency financial assistance to staff affected by natural disasters, demonstrating care for your workforce and reinforcing corporate values.
In today’s rapidly changing world, intentional philanthropic engagement reflects your company’s values, strengthens reputation, and fosters a culture of giving that resonates with employees, clients, and partners. By integrating philanthropy into corporate strategy, companies not only address pressing community needs but also create lasting legacies that amplify business and social impact.
Your Philanthropic Partner
Corporate philanthropy is evolving—but strategic leaders can turn these changes into an advantage. Thoughtful planning allows your organization to amplify community impact, strengthen corporate reputation, and optimize financial outcomes.
Our team at the Community Foundation is ready to help you navigate these changes and craft a giving strategy that is purposeful, effective, and aligned with your corporate vision. Reach out to our Senior Director of Corporate Relations, Stephanie Blair, today to understand how the Community Foundation can develop a customized corporate giving program tailored to your company’s values and goals.
More Helpful Articles by Greater Houston Community Foundation:
- Corporate Social Responsibility and Why It Matters
- How To Set Up a Donor Advised Fund
- The Future of Philanthropy: Amplified Giving Through Collective Generosity
- Supporting Education: A Guide to Scholarships for Donors
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