Marc J Lane

The Biggest Threat to Nonprofits Isn't a Lack of Money

Tue, 01 Sep 2026 10:00:00 -0500

America does not have a nonprofit funding problem.

It has a nonprofit dependence problem.

Every year, Americans donate hundreds of billions of dollars to charitable organizations. Foundations distribute billions more. Governments contract with nonprofits to provide essential services. Corporations sponsor social initiatives. Major donors establish endowments.

Money exists.

What is far scarcer is resilience.

At precisely the moment Americans are asking nonprofits to do more, many of the institutions doing that work are becoming more vulnerable. Nonprofits are expected to address homelessness, workforce development, public health, education, environmental protection and countless other challenges that governments and markets alone have failed to solve.

Yet many of these organizations rest on surprisingly fragile financial foundations.

For years, nonprofit leaders have treated their central challenge as a fundraising problem.

It isn't.

The sector's greatest financial challenge is not a lack of money.

It is an overreliance on any one source of it.

Too many nonprofits are built on a single pillar of support. One depends largely on government contracts. Another relies heavily on foundation grants. A third survives because of a handful of generous donors. These arrangements can appear stable for years, even decades.

Until they aren't.

A recession arrives.

An administration changes.

A foundation shifts priorities.

A donor walks away.

Suddenly, an organization that looked stable discovers it was simply dependent.

Dependence masquerades as stability until the day it doesn't.

The danger is not that nonprofits run out of money. It's that they mistake a single source of money for security.

What appeared to be strength was actually concentration.

And concentration is fragility by another name.

The problem is familiar to anyone who understands risk.

No competent financial adviser would recommend investing an entire retirement portfolio in a single stock. Markets change. Circumstances change. Unexpected shocks occur.

Diversification is not a growth strategy.

It is a survival strategy.

Yet many nonprofits do exactly what investors are taught never to do. They build ambitious missions atop a single dominant revenue source and assume it will always be there.

Hope is not a strategy.

A donor is not a strategy.

A grant is not a strategy.

A contract is not a strategy.

Diversification is a strategy.

But diversification means more than finding additional donors or securing another grant. Increasingly, it means building revenue, not merely raising it.

The strongest organizations understand that financial sustainability requires a diversified portfolio of support. Individual donors provide flexibility. Foundation grants fuel innovation. Government contracts create scale. Corporate partnerships expand reach. Endowments provide continuity.

Earned revenue contributes something equally important:

Independence.

Across the country, nonprofits are discovering something the sector has too often overlooked:

They are not just worthy of support.

They create value.

Consider Goodwill Industries. While most Americans think of Goodwill as a charity, it has long operated one of the nation's most successful social-enterprise models. Revenue generated through the sale of donated goods helps fund job training, workforce development and employment services. In many Goodwill organizations, retail operations are not a side activity. They are the economic engine that powers the mission. Goodwill demonstrates that nonprofits do not have to choose between generating revenue and creating impact. Properly aligned, revenue can be what makes impact possible.

Many nonprofits already possess assets that can generate revenue without compromising mission. They have expertise. They have training programs. They have intellectual property. They have facilities, trusted brands and deep community relationships.

The question is not, "What business should we start?"

The better question is, "What value are we already creating that others would willingly pay for?"

That shift in thinking is producing a new generation of nonprofit leaders. Rather than depending exclusively on philanthropy, they are licensing curricula, monetizing expertise, operating social enterprises, creating fee-for-service programs and building mission-aligned earned-income ventures.

This is not mission drift.

It is mission insurance.

The goal is not to replace philanthropy.

Philanthropy remains indispensable.

The goal is to reduce fragility.

Some organizations are taking an additional step by creating revenue-generating subsidiaries and hybrid structures.

One example is the Low-Profit Limited Liability Company, or L3C, a mission-driven business form designed to pursue social impact while generating modest profits. (Full disclosure: I drafted Illinois’ L3C statute and had a hand in the development of other states’ L3C laws.)

L3Cs and similar structures reflect a reality many nonprofit leaders are only beginning to embrace: society's most persistent challenges often require more forms of capital than charitable giving alone can provide.

The future belongs to organizations that can combine charitable support with sustainable revenue and investment.

Private foundations have an important role to play in that future.

Most nonprofit leaders understand grants.

Far fewer understand Program-Related Investments, or PRIs.

Under federal tax rules, foundations can make loans, equity investments, guarantees and other forms of mission-driven financing when their primary purpose is advancing charitable objectives. These investments can be repaid, recycled and redeployed, allowing philanthropic capital to create impact more than once.

A foundation may participate because of the social return. An impact investor may participate because risk has been reduced. A lender may participate because the project has stronger financial backing. Together, they can finance solutions that none would support alone.

To be sure, no legal structure is a cure-all.

The deeper issue is resilience.

Every nonprofit board should know two numbers:

Where the money comes from.

What happens if it stops coming.

If the largest funder disappeared tomorrow, would the organization still be standing a year from now?

If the answer is unclear, the board has identified its most important problem.

Yet many nonprofits can recite their fundraising totals down to the dollar while remaining unable to explain their concentration risk.

In the investment world, such oversight would be considered reckless.

In the nonprofit world, it remains surprisingly common.

That needs to change.

Boards should spend less time discussing next year's fundraising goals and more time evaluating next year's vulnerabilities. Executive directors should be measured not only by growth but by diversification. Funders should recognize that strengthening financial resilience may be every bit as important as funding program expansion.

After all, when a nonprofit collapses, a balance sheet is not the only thing that disappears.

A child loses a mentor.

A family loses a food pantry.

A worker loses a pathway to employment.

A senior loses support.

Communities feel the consequences long before auditors do.

Every nonprofit has a mission statement.

Increasingly, it also needs a resilience strategy.

A mission statement explains why an organization exists.

A resilience strategy explains why it will still exist ten years from now.

We often ask nonprofits how much money they raised.

We should ask how much risk they carry.

An organization funded by a single source can look successful.

It can even look thriving.

But growth is not resilience.

And revenue is not sustainability.

The nonprofit sector's greatest challenge is not raising more money.

It is reducing dependence.

Institutions do not fail only when funding runs out.

They fail when they discover too late that they depended on a single donor, a single grant, a single contract or a single bet.

The nonprofits that will define the next generation of civil society will not be the ones that raised the most money.

They will be the ones that learned how to survive without any one source of it.

The Metrics That Move Missions: Essential KPIs Every Social Enterprise Should Track

Mon, 03 Aug 2026 10:00:00 -0500

Social enterprises live at the crossroads of purpose and performance. The only way to know whether they are succeeding is to measure what matters.

The best organizations don't drown in spreadsheets. They focus on a handful of Key Performance Indicators that reveal whether their mission is producing real results.

When One Acre Fund tracks changes in farmer income, it is measuring more than economics. It is measuring opportunity. When TerraCycle reports tons of waste diverted from landfills, it is turning environmental ambition into measurable impact. When Year Up tracks graduates who secure full-time jobs, it is demonstrating whether lives are actually changing.

But impact alone doesn't sustain a mission.

The organizations that endure understand that financial health is part of the mission, not separate from it. Metrics such as earned revenue, cash reserves and cost per beneficiary help ensure that a social enterprise can continue serving the people who depend on it.

Operational discipline matters, too. Aravind Eye Care measures efficiency to deliver high-quality care at remarkably low cost. Social Bite tracks performance to improve both service and opportunity for its workforce. Stakeholder satisfaction, partner retention and board engagement offer equally important signals about trust, accountability and mission alignment.

These aren't bureaucratic exercises.

They're the guardrails that keep organizations focused on what matters most.

The question is no longer whether social impact can be measured.

It is whether organizations committed to social change can afford not to measure it.

Good intentions are important. Evidence is essential.

The organizations that create the greatest impact won't be those with the most compelling mission statements. They'll be the ones that can demonstrate results, learn from them and improve upon them.

Metrics don't replace vision.

They make vision accountable.

And in a world that increasingly demands proof, the organizations that measure what matters will be the ones that matter most.

Social enterprises occupy a uniquely demanding space in public life. They are expected to pursue social good while operating with the discipline of a successful business.

Yet too many mission-driven organizations still rely on aspiration instead of evidence when assessing their effectiveness.

Good intentions matter. Measurement matters more.

The most successful social enterprises understand that impact begins with accountability. They identify a handful of key performance indicators that reveal whether their mission is producing real results in people's lives.

For an agricultural nonprofit, that may mean tracking changes in farmer income. For an environmental enterprise, it may be the volume of waste diverted from landfills. For workforce development organizations, it is often the percentage of participants who secure meaningful employment.

These metrics transform broad aspirations into measurable outcomes.

But social impact alone does not sustain a mission.

Organizations that endure recognize that financial performance is not separate from their purpose; it is essential to it.

Revenue diversity, operating margins, cash reserves and customer retention are not merely business metrics. They are indicators of an organization's ability to continue serving the communities that depend upon it.

An enterprise that cannot maintain its financial health eventually loses its capacity to create social value.

Operational effectiveness is equally important. Whether delivering healthcare, educational services or workforce training, organizations must understand how efficiently they deploy resources.

Measuring costs, productivity and stakeholder satisfaction helps leaders identify what works, what does not and where improvements can be made. Far from diminishing the human side of social impact, these metrics strengthen it by ensuring that resources produce the greatest possible benefit.

Governance deserves the same attention.

Boards and leadership teams must regularly evaluate whether organizational growth remains aligned with mission. The pressure to scale, attract funding or expand services can sometimes pull enterprises away from the very problems they were created to solve. Clear governance benchmarks help ensure that growth reinforces purpose rather than replacing it.

The larger lesson is straightforward. The question is no longer whether social impact can be measured. It is whether organizations committed to social change can afford not to measure it.

In an era of increasing demands for transparency and accountability, the enterprises most likely to succeed will be those that can demonstrate both social outcomes and financial resilience. Metrics are not the mission. They are the evidence that the mission is being fulfilled.

Data Science With Purpose: A Commitment to the Public Good

Wed, 01 Jul 2026 10:00:00 -0500

Data science has become one of the most influential forces shaping modern life. With that influence comes a responsibility to use it in service of the public good. Across the world, public‑interest technologists and civic‑tech organizations are already demonstrating what responsible, community‑centered data work can achieve. Code for America partners with state governments to modernize safety‑net systems, using data to simplify access to SNAP and Medicaid so families receive benefits without navigating bureaucratic obstacles. The nonprofit DataKind brings volunteer data scientists together with organizations like the Red Cross and the World Resources Institute to build models that predict wildfire spread, map climate vulnerabilities, and improve disaster response. The Center for Policing Equity uses data to help cities identify racial disparities in policing practices and redesign public‑safety strategies with community input. In Chicago, civic‑tech groups such as Chi Hack Night and the Civic Tech Corps collaborate with local agencies to build open‑data tools that track air quality, monitor public transit reliability, and support neighborhood‑level environmental justice efforts. These initiatives show that when data science is guided by public values, it becomes a tool for transparency, accountability, and human well‑being.

But these successes also reveal what is still missing. Too many communities remain invisible in the datasets that shape policy. Too many algorithms are deployed without public oversight. Too many decisions optimize for efficiency rather than dignity. The lesson from public‑interest tech is clear: impactful data science is not just about technical skill; it is about shared responsibility. It requires listening to the people behind the numbers, designing tools with community partners rather than for them, and ensuring that data systems strengthen democratic participation instead of undermining it. It means supporting organizations that build technology in the open, that publish their methods, that invite scrutiny, and that measure success by whether outcomes become fairer and more humane.

This is where the call to action becomes inseparable from the narrative itself. If we want data science to serve society, then we must invest in the institutions that already embody that mission. We must demand transparency from any system that uses data to make decisions about people’s lives. We must encourage governments, nonprofits, and researchers to adopt open‑data practices, community review processes, and ethical standards that prioritize equity. And we must cultivate a culture in which data scientists see themselves not only as technologists but as stewards of the public interest. The future of data science will be defined not by the sophistication of our models, but by the integrity of our choices. The responsibility belongs to all of us to build data systems that protect rights, expand opportunity, and ensure that every person is seen, valued, and served.

America's Most Ignored Crisis of Violence-and How to Reverse It

Mon, 01 Jun 2026 10:00:00 -0500

The United States pours extraordinary attention and resources into the violence that is rare -- including terrorism, mass attacks, geopolitical threats -- while neglecting the violence that is common. The everyday harms that shape American life come not from foreign enemies but from homicides concentrated in a handful of neighborhoods, from partners who terrorize the people they live with, and from children raised in homes where physical punishment is still treated as discipline. Interpersonal violence kills and injures far more Americans than war or terrorism, yet it remains the country’s most overlooked public crisis.

America’s homicide rate is dramatically higher than that of its peer nations, and the burden falls on communities that have endured decades of disinvestment. One in four women experiences severe physical violence from a partner. Millions of children are subjected to punishment that research shows can alter brain development and increase the likelihood of future aggression. These are not isolated tragedies. They are structural patterns, patterns that cost the country far more lives than the threats that dominate national debate.

The hopeful truth is that none of this is inevitable. The United States has repeatedly shown that interpersonal violence can fall when it is confronted directly. Community violence intervention programs have reduced shootings in cities from Oakland to New York. Hospital‑based violence interruption has broken cycles of retaliation that once seemed unstoppable. Evidence‑based parenting programs have helped families replace physical punishment with healthier approaches. School‑based relationship education has reduced dating violence among teens. These successes prove that violence is not a cultural destiny. It is a policy choice.

But America’s investments still point in the wrong direction. Federal spending on counterterrorism dwarfs funding for domestic violence prevention. Local governments expand enforcement budgets while underfunding the community organizations that have credibility where official institutions do not. Congress debates foreign conflicts with passion while quietly renewing the programs that protect millions of survivors at home. The mismatch between where violence actually occurs and where the country directs its resources is not just inefficient—it is morally indefensible.

Real change requires action at every level of government. At the federal level, expanding the **Violence Against Women Act** would strengthen survivor services, fund prevention programs, and support tribal and rural communities that face high rates of abuse. Increasing investment in **community violence intervention grants** would allow cities to scale up programs that have already reduced shootings. Federal support for **evidence‑based home‑visiting programs** would help parents adopt nonviolent discipline and reduce child maltreatment. And expanding the Earned Income Tax Credit and housing vouchers—policies shown to reduce violence by stabilizing families—would address the economic roots of harm.

States have equally powerful tools. Strengthening extreme risk protection orders can prevent shootings by temporarily removing firearms from people in crisis. Expanding state domestic violence shelters and legal aid gives survivors a path to safety. Investing in violence interruption partnerships allows cities to sustain programs that reduce retaliation and mediate conflicts. And reforming child welfare policies to emphasize prevention rather than punishment can reduce the conditions that lead to abuse.

A safer America begins with a shift in priorities. That means scaling up community violence intervention so that the neighborhoods most affected by shootings have the tools to stop them. It means expanding evidence‑based parenting support so that families can break cycles of harm before they begin. It means strengthening survivor services so that people can leave dangerous relationships without risking homelessness or poverty. And it means investing in economic stability—jobs, housing, and opportunity—because safety is built on the conditions that allow people to thrive.

America knows how to reduce interpersonal violence. The evidence is clear, the tools exist, and the successes are real. What’s missing is the political will to treat the violence that happens in homes and neighborhoods with the same seriousness as the violence that happens on screens. The path to a safer nation begins not with bigger budgets for distant threats, but with a commitment to protect people where they actually live their lives.

Accelerating the Circular Economy: Why Speed Matters Now

Mon, 11 May 2026 10:00:00 -0500

The idea of a circular economy has been circulating for years, but the urgency behind it has never been sharper. As global demand for materials rises and waste volumes climb, the old linear model of producing, consuming, and discarding is hitting its limits. A circular approach—where products are designed to last, materials are kept in circulation, and waste becomes a resource—offers a path that’s both sustainable and economically promising. The challenge is no longer convincing people that circularity matters; it’s figuring out how to make it happen faster.

Policy is one of the strongest accelerators. When governments set clear expectations—whether through repair‑friendly regulations, incentives for recycled content, or accountability for end‑of‑life waste—businesses respond. The most successful examples around the world show that when rules reward durability and penalize waste, innovation follows. Companies begin to rethink how they design products, how they source materials, and how they manage what happens after a product’s first life.

Technology is another powerful catalyst. Digital tools are reshaping how materials move through the economy. Sensors can track the condition of equipment, allowing repairs before breakdowns. Data platforms can match one company’s waste with another’s raw material needs. Advanced analytics help manufacturers understand where resources are being lost and how to close those loops. These technologies don’t just make systems more efficient—they make circular business models viable at scale.

But none of this works without reimagining the products themselves. Circularity starts at the design table. When products are built to be repaired, upgraded, or disassembled, their useful life expands dramatically. Companies experimenting with leasing models or subscription services are discovering that keeping ownership of products gives them a financial reason to design for longevity. It’s a shift that benefits both customers and the planet.

Infrastructure and skills also need to evolve. A circular economy depends on repair networks, remanufacturing facilities, and advanced recycling systems that can handle modern materials. It also requires a workforce trained in everything from product refurbishment to materials science. Cities and regions that invest in these capabilities position themselves as leaders in the next wave of sustainable industry.

And then there’s the cultural piece. People are increasingly open to repairing instead of replacing, buying secondhand, and sharing rather than owning. When communities embrace these habits, they create momentum that businesses and policymakers can’t ignore. Consumer behavior becomes a signal that the market is ready for circular solutions.

Accelerating the circular economy isn’t about one breakthrough or one policy. It’s about aligning technology, design, regulation, infrastructure, and culture so that circularity becomes the natural choice rather than the alternative. The potential benefits—economic resilience, reduced environmental impact, and new opportunities for innovation—are too significant to delay. The faster we move, the more we stand to gain.

The Roots That Outlive Us

Sun, 10 May 2026 09:00:00 -0500

I’m excited to share that I’ve launched a new Substack, Capital & Conscience, where I’ll be posting more frequent writing on how to drive impact through innovation, law, capital, and policy.

My latest piece explores evergreen companies: businesses built for long-term resilience, stewardship, and sustainable value creation rather than short-term extraction. The article examines how mission-driven companies can leverage their community-focused foundations to build organizations that endure across generations while continuing to drive innovation and growth. At a time when so many institutions are driven by short-term incentives, it’s increasingly important to consider how we build companies designed to last.

You can read the article here, and I hope you’ll subscribe to Capital and Conscience to follow future articles and newsletters as the platform continues to grow.

https://marcjlane.substack.com/p/the-roots-that-outlive-us?r=5da9t

Rethinking Giving: The Rise of Regenerative Philanthropy

Fri, 10 Apr 2026 10:00:00 -0500

For decades, philanthropy has been framed as a way to solve problems, a mechanism for directing resources toward the most urgent needs. But a growing movement is challenging that paradigm, arguing that traditional giving often reinforces the very systems that create inequity in the first place. Enter regenerative philanthropy, a mindset shift that’s gaining momentum among funders, nonprofits, and community leaders who want to do more than sustain the status quo.

Moving Beyond “Fixing” Toward “Growing”

At its core, regenerative philanthropy asks a simple but transformative question: What if giving could create more life, more capacity, and more resilience than it consumes? Instead of focusing solely on alleviating symptoms, regenerative approaches aim to strengthen the underlying social, cultural, and ecological systems that communities rely on.

This shift is already visible in the field. The Kataly Foundation has become a leading voice in regenerative giving by providing long-term, unrestricted funding to grassroots organizations—especially those led by Black, Indigenous, and other communities of color. Their approach centers community wisdom and invests in healing, land stewardship, and economic self-determination.

Power-Sharing as a Practice

One of the most radical aspects of regenerative philanthropy is its insistence on redistributing power, not just resources. Traditional philanthropy often places decision-making in the hands of donors, leaving communities to navigate rigid application processes and short-term funding cycles.

Regenerative models flip that script. They prioritize:

Community-led decision-making
Flexible, multi-year funding
Trust-based relationships
Co-creation instead of compliance

Take, for example, The Healy Foundation shifted from a conventional grantmaking model to a trust-based, regenerative approach. They now co-design grant strategies with nonprofit partners, reduce reporting burdens, and treat grantees as equal collaborators. This shift has strengthened relationships and improved long-term outcomes.

Place-Based Solutions With Deep Roots

Regeneration is inherently local. It recognizes that every community has its own history, culture, and assets — and that meaningful change grows from the ground up.

Take HiiiWAV, an Oakland-California- based Black arts and tech incubator, struggled for years to secure traditional funding despite deep community roots. Regenerative funders stepped in with flexible, multi-year support that allowed the organization to expand its programming, stabilize its operations, and deepen its cultural impact. This kind of place-based investment demonstrates how regenerative philanthropy can unlock potential that traditional models overlook.

Or in rural Maine, the Wabanaki Alliance which has received regenerative-style funding to support Indigenous sovereignty, cultural revitalization, and land stewardship. These investments strengthen not just programs, but entire ecosystems of community resilience.

A Shift in Mindset, Not Just Method

What makes regenerative philanthropy powerful isn’t a new set of tools — it’s a new worldview. It asks funders to embrace humility, curiosity, and a willingness to learn alongside the communities they support. It reframes philanthropy as a living system rather than a financial transaction. Most important,, it invites all of us to imagine a future where giving is not an act of charity, but an act of shared stewardship.

Why This Moment Matters

We’re living in a time of overlapping crises — social, environmental, economic. Traditional philanthropy, for all its contributions, wasn’t designed to meet challenges of this scale. Regenerative philanthropy offers a path forward that is more relational, more adaptive, and more aligned with the complexity of the world we’re trying to change.

It’s not just about funding projects. It’s about nurturing ecosystems.

It’s not just about solving problems. It’s about growing possibilities.

And it’s not just about giving back. It’s about giving in a way that creates more life than it takes.

The State of the Union Needs YOU

Wed, 04 Mar 2026 00:00:00 -0600

Everyone matters in a democracy.

Everyone.

We all have an important role to play, always. Lawyers especially, but everyone.

This week’s State of the Union is cause for a pause to reflect on the role we all play.

Always, and especially now.

Let’s do (more) good (better)—united—together.

A Good Quote

“Democracy is not a spectator sport” —Marian Wright Edelman

A Good Note

What you can do. Right now.
It often feels like there isn’t much we can do when the world feels chaotic.

Confusion and overwhelm create a chilling effect. Too many issues create analysis paralysis.

That’s exactly when taking action matters most.

The antidote is taking the next step that matters to you.

In my podcast episode with Skye Perryman (she/her) of Democracy Forward —one of the most consequential organizations working to protect democracy for everyone—she offers two clear, specific calls to action.

First, for everyone—no matter who you are or what you do.

Watch that clip here:

Second, specifically for lawyers who may be struggling to understand what they can do if they’re not a constitutional, immigration, or civil rights lawyer, or a litigator.

I understand this struggle. The desire to do something but not knowing what your expertise has to do with “the moment.”

Here’s Skye’s answer (and it’s simpler than you think):

No matter who you are, where you are, or what you do, you matter. You have a role to play in this democracy.

And yes, the next right step can be as simple as tuning into a podcast episode to learn more. Sometimes the simplest next step is the best one.

Remember: momentum begets momentum. Often taking action reveals clarity for the path ahead. So start simple. But start.

If this resonates, start by giving this important episode a listen.

Take your next step from there.

A Good Example

Marc J. Lane - The OG of Social Enterprise Law

Marc isn’t arguing in front of the Supreme Court or organizing marches. But he’s still part of the work to strengthen our union.

Don’t get me wrong, I believe Marc cares deeply about democracy and civic engagement. But like many lawyers, his practice is where his impact lies.

He’s one of the early pioneers of Social Impact Law. He literally wrote the book on social enterprises (The Mission Driven Venture). It’s one of the two required texts for the law school class I teach at my alma mater, Chicago-Kent College of Law.

That’s actually me (in the picture above) sitting in the front row listening to Marc during his guest lecture in my class this week.

Marc is a smart and inspiring lawyer who works every day to help social enterprise deliver value across industries, sectors, and the world.

I’m grateful to Marc for sharing his insights with the next generation of social impact lawyers who will contribute to strengthening the state of the union.

You can see more about Marc’s guest lecture on my LikedIn post here.

A Good Recommendation

Take this next right step.

If you haven’t yet listened to (or watched) Skye’s episode, give it a whirl. You can watch on YouTube via the link above, listen or watch on Spotify, or listen on Apple Podcasts. This “moment” is a persistent one. It’s not ending anytime soon. And so taking inspiration, motivation, and action after listening to Skye’s words of wisdom (and there are many) is a great next right step.

I’d love to hear what you think of this important episode!

Share the Good!

Share this with someone you know who cares about democracy.

Originally published at https://www.linkedin.com/pulse/state-union-needs-you-scott-m-curran-cc1hc/

Illinois Offers Relief to Charities Facing Declining Donations

Mon, 02 Mar 2026 10:00:00 -0600

Charitable giving in Illinois has been declining in recent years, driven by economic uncertainty, donor skepticism and broader national trends. Among those trends, high inflation has reduced donors’ disposable income. As a result, nearly 74% of Illinois nonprofits report job vacancies, and many have longer waitlisted for services. Inevitably. staffing shortages limit nonprofits’ outreach capacity, which can further depress giving.

But Illinois is doing something about the problem. The Illinois Gives Tax Credit Program offers a 25 percent income tax credit to individuals and businesses that contribute to permanent endowed funds held by Qualified Community Foundations (QCFs) which themselves are exempt from tax under Section 501(c)(3) of the Internal Revenue Code.

A permanent endowment is a fund which is kept in perpetuity, with only its earnings providing regular operating support and funding for charitable projects. Other than investing, the holding foundation may not use any of the money from the initial donations. Instead, the foundation are to use the earnings it receives from the investment of the initial donation to support its projects and operations.

To qualify for the Illinois Gives Tax Credit Program, the permanent endowment funds must:

provide charitable grants exclusively for the benefit of residents of Illinois or charities and charitable projects located in Illinois,
exist in perpetuity,
have an annual spending rate based on the foundation’s spending policy (not to exceed 7%), and
not be a donor-advised fund.

The Illinois Department of Revenue can issue up to $5 million in tax credits per calendar year (25% of the $20 million maximum donation amount). IDOR can issue up to $100,000 in tax credits per taxpayer per calendar year (25% of the $400,000 maximum donation amount made by a single taxpayer eligible for credits under the program); and up to $750,000 in tax credits per calendar year (25% of the $3 million maximum donation amount made to a single QCF eligible for credits under the program) as a result of contributions made to a single QCF.

MIGHT TAX-DAY CHARITABLE DEDUCTIONS BE IN OUR FUTURE?

Tue, 03 Feb 2026 10:00:00 -0600

The impact of last year’s One Big Beautiful Bill Act on charitable tax deductions, particularly for high-income donors, has prompted scholars and policymakers alike to rethink the incentives around charitable giving.

Starting this year, only charitable gifts exceeding 0.5% of a taxpayer’s Adjusted Gross Income (AGI) will be deductible, so if one’s AGI is $200,000, the first $1,000 of charitable gifts will not be deductible. And donors in the 37% federal tax bracket will see their deductions capped at 35% of their gifts’ value, so a $100,000 deduction could be reduced by up to $5,405.

The truth is, taxpayers don’t know what their AGI will be this year, let alone what 0.5% of it will be. But what if they could make this year’s charitable gifts anytime through April 15, 2027, when they would know exactly how much tax relief their donations would buy them?

Behavioral psychologists tell us that empowering the taxpayer to decide how much to donate to charity during tax time -- when she knows how much of a federal subsidy her gift would trigger -- should incentivize greater charitable support.

The .05% floor will also encourage some taxpayers to “bunch” their charitable giving into tax years when it will do them the most good, a strategy easier to implement if they were to have until Tax Day to finalize their giving decisions. Tax-Day charitable deductions should also reduce the volatility in revenue charities would likely experience if bunching catches on, as it probably will.

The Tax-Day charitable deduction is a donor-centric, pro-charity proposal with positive societal implications. It would nudge pro-social behavior at the very moment prospective donors are most receptive. It would improve the efficiency of charitable incentives. And it would strengthen civil society infrastructure.

Still, with Congress fractured as never before, legislative action is unlikely anytime soon. But it’s not too soon for those who see merit in allowing taxpayers to make and deduct charitable donations up until Tax Day to start mobilizing public support. Their efforts today can improve the odds that a future Congress will take seriously the potential of revising our tax code in order to help taxpayers render better financial decisions, to reduce volatility in nonprofit budgets, and to make the public costs and benefits of charitable donations more transparent.

The donor community, the social sector and the rest of us deserve no less.

To explore sophisticated tax-savings opportunities available to you and your business, please feel free to reach out to Marc Lane in confidence at MLane@MarcJLane.com or 312/800-372-1040.