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Tax incentives for donations: What Non-Profits need to know
Belgium cuts tax deduction for donations from 45% to 30% starting fiscal year 2026, impacting non-profit fundraising strategies.
- Tax reduction lowered: Starting with fiscal year 2026 (income 2025), the tax reduction for charitable donations in Belgium will decrease from 45% to 30%, reducing the fiscal incentive for donors.
- Impact on non-profits: Recognised non-profit organisations retain their status, but donor behavior may shift. Non-profits should diversify revenue streams and adopt innovative engagement models to mitigate potential declines in donations.
Key takeaways
The Belgian law containing various provisions, approved by the House of Representatives on December 11, 2025, introduces a significant change for donors and the non-profit sector. Starting with fiscal year 2026, the tax reduction for charitable donations will decrease from 45% to 30%.
What does this mean?
Individuals will still benefit from a tax deduction when making donations to recognised non-profit organisations, but the incentive is now lower. In practice, donors will be able to deduct less from their taxes for the same donation amount.
Impact on non-profits:
Recognised non-profit organisations will retain their status; however, the reduced fiscal advantage may influence donor behavior. Non-profits should consider diversifying their income sources beyond donations by exploring alternative revenue streams and creative engagement models to adopt innovative engagement models to offset any potential decline in donations.
“With the tax reduction for donations dropping to 30%, non-profits should diversify income streams and adopt innovative engagement models to offset potential declines in contributions.”
Action Points
- Rethink your strategy to diversify revenue streams: Explore alternative sources of income beyond traditional donations, such as partnerships, grants, membership programs, or paid services, to reduce dependency on donor contributions.
- Innovate donor engagement: Create dynamic engagement models—such as digital campaigns, impact storytelling, and loyalty programmes—to sustain donor interest and mitigate potential declines in donations caused by reduced tax incentives.
- Contact EY Law’s Non-Profit & Associations team: Discuss how these strategic changes can be implemented within your governance framework to ensure compliance and operational efficiency.