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Building Your Farm’s Professional Advisory Team

Running a successful farm requires more than strong production skills. It also depends on having the right people around you to support decision making, protect the business, and help you plan for the future. A well-built advisory team allows you to focus on farming while trusted professionals handle the areas that demand specialized expertise. …

Running a successful farm requires more than strong production skills. It also depends on having the right people around you to support decision making, protect the business, and help you plan for the future. A well-built advisory team allows you to focus on farming while trusted professionals handle the areas that demand specialized expertise.

No two farms need the exact same team, but the most effective operations intentionally surround themselves with advisors who understand agriculture and work toward shared goals.

Understanding the Roles on Your Team

Every farm relies on a mix of contributors who move the business forward and protect what has been built. Some advisors focus directly on profitability and production, while others play a critical role in managing risk and long-term stability.

Operational advisors often include lenders, agronomists, nutritionists, marketing professionals, seed and chemical representatives, veterinarians, and production employees. Their work directly affects yields, efficiency, and cash flow.

Protective advisors help safeguard the business and family. These typically include accountants, attorneys, insurance providers, succession planners, and trusted service professionals. While their impact may be less visible day to day, their role is essential to preserving assets and preventing costly mistakes.

In addition to formal advisors, many farms rely on a broader support network that includes family members, Extension specialists, mentors, neighbors, and peer producers. These relationships often provide perspective and practical insight when it matters most.

Finding the Right Fit Matters

The value of an advisory team depends on how well its members align with your operation and goals. Credentials alone are not enough. Advisors must understand agriculture and be willing to engage with your specific challenges.

Many producers discover that an advisor who served a previous generation well may not be the best fit for the next phase of growth. As operations expand, take on more risk, or change structure, their advisory needs naturally evolve. Reassessing your team is not a sign of disloyalty; it is a necessary step in managing a sophisticated, growing business.

Strong advisors communicate clearly, return calls, ask thoughtful questions, and show confidence in your vision. They should challenge assumptions when needed and support informed decision making rather than simply reacting to problems.

The Time Saving Value of a Strong Team

One of the most overlooked benefits of a well-built advisory team is time. When responsibilities are clearly delegated and supported by capable professionals, owners gain both mental space and hours in the day.

Clear systems, shared platforms, and proactive communication reduce last minute stress. Tax planning becomes less disruptive. Legal and financial issues are addressed before they become urgent. Equipment breakdowns, labor challenges, and operational risks are managed more efficiently because the right people are already in place.

This support is especially important for multi-generational operations where responsibilities are shared among family members and employees. A strong team helps prevent burnout and allows the business to function smoothly even during peak seasons.

Making Sure Advisors Are Aligned

A common challenge in farm operations is working with advisors who operate independently without coordination. Financial plans, legal documents, lending structures, and succession strategies may each make sense on their own but fail to work together.

Alignment across advisors is critical. When your accountant, attorney, and lender are not communicating, gaps and conflicts can emerge. Coordinated planning helps ensure decisions support both short-term operations and long-term goals.

Having a central point of coordination, whether that is an internal leader or a trusted advisor, helps keep everyone focused on the same objectives and reduces the risk of conflicting strategies.

Knowing When to Make a Change

If a professional relationship is not working, it is important to recognize that you are the client. Advisors are there to serve the goals of the farm. If communication is poor, understanding is lacking, or progress feels stalled, it may be time to seek a second opinion or make a change.

Moving on from an advisor does not require conflict. Often, it simply reflects a shift in needs or direction. Giving yourself permission to adjust your team helps ensure the business remains supported as it grows and changes.

Building And Maintaining Your Roster

Recommendations from trusted peers, lenders, and current advisors are often the best way to find new team members. Asking who has helped others navigate similar situations can lead to better matches than asking general questions about who is “good” at their job.

Technology has also expanded access to specialized expertise. Geographic location is no longer a barrier to working with professionals who understand agriculture and your specific challenges.

Once your team is in place, regular check-ins help keep everyone aligned. Reviewing goals, updating plans, and evaluating progress ensures advisors remain focused on supporting the direction of the farm rather than reacting to isolated issues.

How De Boer, Baumann & Company Can Help

Strong advisory teams do not form by accident. They are built intentionally around the goals and structure of the operation. De Boer, Baumann & Company works with agricultural producers to coordinate financial planning, tax strategy, succession planning, and long-term decision making. Our team helps connect the dots between advisors so farm owners can move forward with clarity and confidence.

To read the full article by Lisa Foust Prater, please visit https://www.agriculture.com/draft-your-farms-professional-dream-team-8708459.

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Factoring Living Expenses Into Farm Compensation Planning

As farm families review year-end financials and prepare for another season, compensation conversations often rise to the surface. Wages, salaries, and major capital investments tend to get the most attention. One area that is frequently overlooked, however, is family living expenses. While these costs may seem modest compared to land, equipment, or operating inputs, …

As farm families review year-end financials and prepare for another season, compensation conversations often rise to the surface. Wages, salaries, and major capital investments tend to get the most attention. One area that is frequently overlooked, however, is family living expenses.

While these costs may seem modest compared to land, equipment, or operating inputs, they can significantly affect cash flow and profitability, especially when multiple families rely on the business for support. When living expenses are not clearly understood or documented, they can also become a source of tension within family operations.

 

Why Living Expenses Matter More Than You Think

Family living expenses often flow through the farm business in ways that are not always obvious. Housing, utilities, vehicles, insurance, and other benefits may be paid by the operation and deducted for tax purposes. While these arrangements can be tax efficient, they can also blur the line between compensation and business expenses.

When these costs are not clearly identified, it becomes difficult to answer a basic question: what is each person actually living on? Without that clarity, compensation discussions are incomplete and comparisons between roles can feel unfair, even when no one intends them to be.

Understanding the full cost of supporting family members through the business is an important step toward more transparent financial planning.

 

Separating Compensation From What the Business Can Afford

In many family operations, compensation discussions get tangled with concerns about cash flow. Rather than setting compensation based on the value of the work being performed, families often ask what the business can afford in a given year.

In a nonfamily business, compensation decisions are typically made based on market value for a role. If the business cannot afford that cost, staffing changes are considered. Family businesses rarely operate this way. Instead, they often reduce pay, defer compensation, or rely on operating loans to cover gaps. Over time, this can lead to resentment and confusion, especially if expectations are not clearly communicated.

Developing a formal compensation plan helps shift the focus from short-term affordability to long-term sustainability and fairness.

 

Accounting for Hidden Compensation

Many farms provide benefits that function as compensation but are not always recognized as such. Housing, vehicles, insurance coverage, meals, or even animal boarding can represent a significant portion of an individual’s total compensation package.

When these benefits are not quantified, individuals may underestimate what they are receiving from the business. A role that appears to pay a modest salary may actually provide a much higher level of total compensation once these benefits are considered.

Quantifying both wages and benefits allows families to see the full picture. It also provides a foundation for addressing perceived inequities and making informed adjustments.

 

Building a Market-Based Compensation Plan

A strong compensation plan often starts with a market-based assessment. Consider what a similar role would command if the farm had to hire a nonfamily employee. This approach helps establish a fair baseline for labor and management compensation.

Once total compensation is defined, benefits can be allocated based on individual circumstances. One family member may need health insurance through the farm, while another may receive coverage elsewhere. Flexibility within the compensation structure allows benefits to be adjusted while maintaining overall fairness.

Clear documentation ensures everyone understands how compensation is determined and what it includes.

 

Separating Returns to Labor From Returns to Ownership

Another common challenge in family farms is distinguishing between compensation for work performed and returns generated by ownership. Without clear policies, profits may be distributed unevenly or used to supplement wages in strong years, only to be reduced when conditions change.

Establishing a policy that prioritizes fair, competitive compensation first helps create consistency. Profits earned beyond compensation can then be distributed based on ownership interests. This separation supports more stable planning and reduces emotional decision making tied to short-term performance.

Clear distinctions are especially important as farms bring in the next generation or involve multiple family branches.

 

Establishing Expense And Reimbursement Policies

Expense management is another area where clarity matters. Personal expenses can easily be buried in operating categories, whether intentionally or unintentionally. Over time, this practice distorts financial reporting and complicates compensation discussions.

Clear policies should define which expenses may be charged to the business and how reimbursements are handled. Regular review of expenses encourages accountability and promotes more disciplined spending.

Some farms benefit from structured discussions around expenses, while others rely on documented policies and periodic reviews. The right approach varies, but consistency is key.

 

Having The Right Conversations At The Right Time

Discussions about compensation and expenses are not easy, but avoiding them creates greater risk over time. These conversations are best handled intentionally, separate from holidays or emotionally charged family gatherings.

Trusted advisors can play an important role in these discussions. Accountants and lenders bring objectivity and financial insight that can help families evaluate options and make informed decisions grounded in data rather than assumptions.

 

How De Boer, Baumann & Company Can Help

Compensation planning in family farm operations requires more than setting wages. It involves understanding living expenses, valuing benefits, separating ownership returns, and aligning policies with long-term goals. De Boer, Baumann & Company works with agricultural producers to develop clear, practical compensation and expense structures that support fairness, transparency, and financial sustainability.

To read the original article by Katie Micik Dehlinger, please visit https://www.dtnpf.com/agriculture/web/ag/news/article/2025/12/01/hidden-benefits.

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A Conversation Is Not a Contract: Why Farm Succession Plans Must Be Put in Writing

Many farm families talk openly about the future. They discuss who will run the operation, how responsibilities will shift, and what retirement might look like for the senior generation. These conversations are important, but they are not enough. Without written agreements and legal documentation, even the best intentions remain uncertain. A farm succession plan …

Many farm families talk openly about the future. They discuss who will run the operation, how responsibilities will shift, and what retirement might look like for the senior generation. These conversations are important, but they are not enough.

Without written agreements and legal documentation, even the best intentions remain uncertain. A farm succession plan that exists only in conversation leaves too much room for misunderstanding, delay, and conflict. For the next generation, that uncertainty can become a significant source of stress.

 

When Responsibility Grows but Certainty Does Not

In many family farm operations, the next generation gradually takes on more responsibility. They manage day-to-day operations, oversee production decisions, and help stabilize the business so the senior generation can step back. Over time, this shift often allows parents to travel more, reduce stress, and enjoy life beyond the farm.

The challenge arises when increased responsibility is not matched with clarity about the future. Assumptions replace assurances. Verbal comments like “you’re doing great,” “we will take care of it,” or “that sounds fair” feel encouraging, but they do not define ownership, authority, or timelines.

As years pass, uncertainty grows. The next generation may wonder what their long-term role will be, how assets will transition, and whether their commitment is truly recognized. Strong working relationships can mask these concerns until frustration quietly builds.

 

Why Verbal Agreements Fall Short

Families often avoid formal planning because conversations feel easier than documentation. Topics like ownership transfer, compensation, and estate planning can feel uncomfortable, especially when relationships are positive.

The problem is that verbal alignment does not guarantee shared understanding. People may interpret the same conversation very differently. What sounds like agreement to one person may feel like a loose idea to another.

Without written documentation, expectations remain untested. Decisions are delayed. When a triggering event occurs, such as illness, death, or burnout, the lack of clarity can quickly turn into conflict. In many cases, this is when farms are divided, sold, or lost entirely.

 

What Successful Transitions Have in Common

Farms that transition successfully do not rely on assumptions. They take the time to document how the business operates today and how it is expected to operate in the future. With family, more clarity is required, not less.

Written plans help protect relationships by removing ambiguity. They provide a shared reference point and create accountability for follow through. Most importantly, they give the next generation confidence that their future is being taken seriously.

 

Key Items That Should Be Documented

A comprehensive succession plan typically includes clear documentation across multiple areas of the business:

  • Ownership documents such as titles, deeds, and asset records

  • Business structure documentation for corporations, LLCs, or partnerships, including operating and organizational agreements

  • Exit strategies, including buy-sell agreements and transfer provisions

  • Leases and contracts tied to land, equipment, or facilities

  • Compliance and regulatory documentation

  • Defined signature authority and decision-making responsibilities

  • Accurate meeting minutes and formal records

  • Core business documents such as mission statements, goals, standards, and financial reports

  • Conflict resolution processes

  • Employee documentation including job descriptions, compensation, and benefits

  • A written succession plan outlining leadership and ownership transition

  • Estate planning documents when individually-owned assets affect business continuity

Each of these elements helps ensure the farm can continue operating smoothly while ownership and leadership evolve.

 

Starting the Conversation the Right Way

When relationships are strong, the next generation has earned the right to ask meaningful questions about the future. Asking for clarity is not a sign of impatience or entitlement. It is a necessary step in protecting both the business and the family.

Setting aside dedicated time to discuss concerns and expectations can help move conversations into action. Written plans do not need to answer every question immediately, but they should establish direction, structure, and next steps.

 

How De Boer, Baumann & Company Can Help

Farm succession planning involves more than estate documents. It requires alignment between ownership, management, tax planning, and long-term business goals. De Boer, Baumann & Company works with farm families to bring structure and clarity to succession planning conversations. Our team helps clients document expectations, evaluate financial impacts, and build practical plans that support continuity while preserving family relationships.

To read the original article by Jolene Brown, please visit https://www.agriculture.com/a-conversation-isn-t-a-contract-put-your-farm-succession-plan-in-writing-11825340

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Getting Farm 1031 Exchanges Right

Section 1031 exchanges continue to be a common planning tool for agricultural producers, particularly as land sales tied to solar projects, data centers, and inherited property increase. While many 1031 exchanges follow a familiar structure, farmland introduces unique considerations that can complicate the process if not addressed early. A 1031 exchange can offer meaningful …

Section 1031 exchanges continue to be a common planning tool for agricultural producers, particularly as land sales tied to solar projects, data centers, and inherited property increase. While many 1031 exchanges follow a familiar structure, farmland introduces unique considerations that can complicate the process if not addressed early.

A 1031 exchange can offer meaningful tax deferral opportunities, but it is highly rule driven. Understanding the nuances specific to agricultural land is essential to avoiding costly missteps.

What Is a Section 1031 Exchange?

Section 1031 of the Internal Revenue Code allows taxpayers to defer capital gains taxes by exchanging qualifying property used in a trade or business or held for investment for another like-kind property. The IRS defines like-kind as property of the same nature or character, even if it differs in grade or quality.

For real estate, this definition is broad. Improved and unimproved real property generally qualifies as like-kind, making farmland eligible for exchange into other real property used for business or investment purposes.

Why Farm 1031 Exchanges Are More Complex

Agricultural land is rarely just land. A typical farm property may include buildings, irrigation or tiling systems, a personal residence, and associated water or mineral rights. Each of these components can carry different tax classifications, which affects how they must be treated within a 1031 exchange.

Another common complication in agriculture is related party transactions. Family-owned operations often involve exchanges between relatives or commonly owned entities, which triggers additional IRS scrutiny and stricter compliance requirements.

Understanding Asset Class Treatment

Farm properties often consist of multiple asset classes, each with its own exchange rules.

Land is generally the most straightforward. It can be exchanged for other qualifying real property on a tax deferred basis, provided all net proceeds and cash are reinvested in the replacement property.

Section 1250 property includes buildings other than certain livestock or storage facilities. These assets must be exchanged for equal or greater Section 1250 property to maintain tax deferral.

Section 1245 property includes certain depreciable assets tied to the operation. To qualify for tax free treatment, these assets must be exchanged for equal or greater Section 1245 property. It is important to note that personal property such as tractors or vehicles no longer qualifies as like-kind property for 1031 purposes.

Properly allocating value among these asset classes is critical, as an error can result in unexpected taxable gain.

The Role of Debt in a 1031 Exchange

Debt is another key factor that can affect the success of a 1031 exchange. If the relinquished property carries debt, the replacement property must generally have equal or greater debt to avoid triggering taxable boot.

This requirement often necessitates early conversations with lenders. In some cases, debt may need to be restructured or refinanced to align with the exchange rules. Addressing financing before the sale closes helps prevent delays or disqualification later in the process.

Timing Rules You Cannot Miss

Timing is one of the most rigid aspects of a 1031 exchange. Once the relinquished property is sold, the taxpayer has 45 days to identify potential replacement properties. The exchange must be fully completed within 180 days of the original sale.

During this period, sale proceeds must be held by a qualified intermediary. The taxpayer cannot access or control the funds at any point during the exchange. Missing a deadline or improperly handling funds can cause the entire transaction to become taxable.

Replacement Property Identification Rules

When identifying replacement property within the 45 day window, taxpayers must follow specific identification rules.

Under the three property rule, up to three potential replacement properties may be identified regardless of their value.

Under the 200 percent rule, any number of properties may be identified as long as their combined fair market value does not exceed 200 percent of the relinquished property.

Selecting the appropriate identification strategy depends on market conditions, availability of land, and the overall exchange plan.

Special Considerations for Related Party Exchanges

Related party 1031 exchanges are subject to additional restrictions. Related parties include family members, commonly owned entities, and certain trusts. These transactions are closely reviewed by the IRS due to the potential for abuse.

When a 1031 exchange involves a related party, neither party may dispose of the acquired property within two years. If this rule is violated, the deferred gain becomes taxable. Proper documentation is also critical. Transactions should be conducted at fair market value and structured as arm’s length arrangements to reduce audit risk.

Planning Ahead Matters

While 1031 exchanges are often described as straightforward, agricultural exchanges rarely are. The combination of multiple asset classes, financing considerations, timing rules, and family involvement increases the margin for error.

Producers considering a 1031 exchange should involve their advisory team early. Careful planning helps ensure the exchange achieves its intended tax deferral and supports broader operational and succession goals.

How De Boer, Baumann & Company Can Help

Section 1031 exchanges require careful coordination between tax planning, transaction structure, and long term business strategy. De Boer, Baumann & Company works with agricultural producers to evaluate exchange opportunities, identify risks, and navigate the technical requirements specific to farmland transactions. Our team helps ensure exchanges are structured properly and aligned with your broader financial and succession plans.

To read the original article by Rod Mauszycki, please visit https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2025/12/03/get-farm-1031-exchange-right.

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Supporting Generational Transitions in Farm and Ranch Operations

Generational transitions are some of the most consequential moments in the life of a farm or ranch. These changes go far beyond ownership paperwork or management titles. They influence daily decision making, long-term strategy, family relationships, and the financial stability of the operation for years to come. While every transition is different, many challenges …

Generational transitions are some of the most consequential moments in the life of a farm or ranch. These changes go far beyond ownership paperwork or management titles. They influence daily decision making, long-term strategy, family relationships, and the financial stability of the operation for years to come.

While every transition is different, many challenges stem from the same source. Multiple generations bring valuable but different strengths to the business. When those strengths are not intentionally aligned, frustration and uncertainty can follow. When they are, the operation is often better positioned for continuity, growth, and resilience.

Understanding how each generation contributes is a critical starting point for a successful transition.

Recognizing the Strengths of Each Generation

Senior generations bring decades of experience shaped by market cycles, weather volatility, equipment challenges, labor issues, and lender relationships. They understand which decisions carry lasting consequences and where risks tend to surface over time. This depth of knowledge provides valuable perspective when evaluating opportunities and navigating uncertainty.

Younger generations often contribute energy, adaptability, and comfort with technology and data-driven decision making. They are typically more open to new tools, evolving production methods, and operational efficiencies. Their ability to learn quickly and challenge long-standing assumptions can reveal opportunities for improvement and long-term sustainability.

Both perspectives are essential. Challenges often arise when expectations around decision making, authority, and communication are unclear.

Creating Space for the Next Generation to Lead

One of the most common transition challenges occurs when senior generations remain deeply involved in every operational decision. While this involvement is often rooted in responsibility and care for the business, it can unintentionally limit the confidence and development of the next generation.

Allowing younger family members space to solve problems is essential. That may involve stepping away from daily operations periodically or intentionally allowing others to manage issues as they arise. This space creates opportunities for learning, accountability, and leadership growth.

It is also important to resist the urge to correct every mistake. Not every issue requires immediate intervention. In many cases, lessons learned through experience are far more valuable than guidance given too early. A practical approach is to step in only when a decision presents a significant financial or operational risk.

Financial structure can also influence how easily senior generations step back. When personal income depends entirely on operating profits, releasing control becomes more difficult. Separating income through land rent, equipment rent, or retirement resources can provide greater flexibility during the transition.

Supporting the Senior Generation Through Change

Transitions affect both sides. For senior generations, stepping away from a business built over decades represents a major life shift. Supporting that change requires clarity, respect, and open communication.

Younger leaders should clearly define where they want input and involvement. This helps avoid confusion and reduces overlap in authority. Asking for guidance in specific areas, such as lender relationships, land negotiations, or production planning, allows experience to be shared productively without undermining leadership roles.

Encouraging senior generations to teach, document, and share institutional knowledge is also valuable. Many farms rely on unwritten processes and historical insight that can be difficult to replace. Capturing that knowledge supports continuity and reduces risk during and after the transition.

Equally important is encouraging meaningful activities outside of daily operations. Community involvement, mentoring, industry boards, family time, or personal projects can help maintain a sense of purpose while supporting a healthy transition away from day-to-day management.

Aligning Expectations Early

Many transition challenges arise from assumptions that are never discussed. Who makes final decisions? How are profits distributed? What does the long-term vision look like? Addressing these topics early creates clarity and reduces the risk of conflict.

Formal transition planning helps structure these conversations. Ownership arrangements, management responsibilities, compensation, and timelines should be clearly documented and reviewed regularly. Planning does not eliminate flexibility, but it does create shared understanding and alignment.

Professional advisors can play an important role in facilitating these discussions. A neutral perspective helps families evaluate financial implications, identify risks, and model outcomes before challenges arise. Thoughtful planning supports both the business and the relationships behind it.

Building a Stronger Future Together

A successful generational transition does not happen by chance. It requires trust, patience, and intentional collaboration from all involved. When senior and younger generations align their strengths and expectations, farms and ranches are better positioned to remain financially sound and operationally strong for generations to come.

How De Boer, Baumann & Company Can Help

Generational transitions involve complex financial, operational, and family considerations. De Boer, Baumann & Company works closely with agricultural producers to provide guidance through ownership transitions, management changes, and long-term planning. Our team helps bring structure and clarity to the process so families can make informed decisions that support continuity, financial stability, and lasting success.

To read the original article by Lance Woodbury, please visit https://www.dtnpf.com/agriculture/web/ag/news/article/2025/12/01/supporting-generational-transitions.

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Employee Spotlight: Cody Simons

Since joining De Boer, Baumann & Company as an intern during the 2022 tax season, Cody Simons has steadily built a foundation rooted in hard work, resilience, and a genuine commitment to growth. What began as an internship quickly turned into a full-time opportunity, allowing Cody to continue developing his skills while completing his …

Since joining De Boer, Baumann & Company as an intern during the 2022 tax season, Cody Simons has steadily built a foundation rooted in hard work, resilience, and a genuine commitment to growth. What began as an internship quickly turned into a full-time opportunity, allowing Cody to continue developing his skills while completing his education and fully immersing himself in the profession.

Cody attended Grand Valley State University, earning his Bachelor of Business Administration with an emphasis in Accounting and Finance in December 2022. After graduation, he chose to step directly into a full tax season to gain hands-on experience before returning to GVSU to complete his Master of Science in Accountancy, which he earned in April 2025. His college journey took place during a uniquely challenging time, navigating academics amid a pandemic. Seeking connection and balance, Cody joined Pi Lambda Phi, a social fraternity that helped him build lasting relationships and a strong sense of community that continues to shape his life today.

Originally born in Lansing and raised in the small town of Bannister, Michigan, Cody credits much of who he is today to his parents, Mike Simons and Val Booth. Their unwavering encouragement, presence at every sporting event, and support throughout his education left a lasting impact. Cody speaks with deep gratitude about the values they instilled in him, noting that everything he has achieved stems from how they raised and supported him.

That strong work ethic showed up early. At just 13 years old, Cody started his first job at a local seed farm, spending summers detasseling corn in all conditions. The work was physically demanding and required perseverance, but it also gave him firsthand insight into farm operations. Those early experiences continue to serve him well today, especially when working with DBC’s agricultural clients.

When busy season winds down, Cody is intentional about recharging. He and his girlfriend have made Friday night date nights a tradition, often enjoying dinner in Grand Rapids or catching a Griffins game at Van Andel Arena. After tax season, they plan an annual trip between May and June to explore a new city and attend a Major League Baseball game. Their long-term goal is to visit every ballpark in the country!

Cody’s journey reflects determination, adaptability, and a strong sense of purpose. We are proud to highlight his growth and the perspective he brings to DBC, shaped by experience, resilience, and a deep appreciation for the people who helped him along the way.

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Preparing for 2026–27: What Not-for-Profit Leaders Need to Know About the New Charitable Giving Rules

The passage of the 2025 Reconciliation Act, often referred to as the “One Big Beautiful Bill Act” (OBBBA), introduced sweeping updates to federal charitable giving regulations that will begin taking effect in 2026 and 2027. These changes will have far-reaching implications for not-for-profits, donors, and fundraisers across all sectors. For not-for-profit leaders, now is …

The passage of the 2025 Reconciliation Act, often referred to as the “One Big Beautiful Bill Act” (OBBBA), introduced sweeping updates to federal charitable giving regulations that will begin taking effect in 2026 and 2027. These changes will have far-reaching implications for not-for-profits, donors, and fundraisers across all sectors.

For not-for-profit leaders, now is the time to plan ahead. Understanding the new giving landscape early will help organizations adapt their fundraising strategies, communicate effectively with donors, and safeguard financial stability in the years ahead.

Key Changes to Charitable Giving Rules

A recent report from Arts, Culture, and Media Philanthropic Advisors, titled One Big Beautiful Bill Act and Charitable Giving in 2026: Guidance for Fundraisers, outlines several significant updates that will affect how individuals and corporations give.

Expanded Deduction for Non-Itemizers

Starting in 2026, taxpayers who do not itemize will be eligible for a charitable deduction on cash contributions, up to $1,000 for individuals and $2,000 for joint filers. Donations to private foundations and donor-advised funds do not qualify, and these amounts will not be adjusted for inflation. This change reintroduces a version of the universal charitable deduction, designed to encourage everyday donors to give.

Permanent 60 Percent Limit for Individual Cash Gifts

The new law makes permanent the increased deduction limit, 60% of adjusted gross income (AGI), for individuals contributing cash gifts to qualified charitable organizations. This continues a provision that had been temporary under prior legislation, ensuring greater flexibility for generous donors.

New 0.5 Percent Floor for Itemizers

Beginning in 2026, taxpayers who itemize may only deduct charitable gifts that exceed 0.5% of their AGI. In addition, those in the top tax bracket (37%) will receive a slightly reduced deduction value, 35 cents on the dollar rather than 37. While the difference may seem small, this adjustment could influence high-income donors’ giving behaviors.

Tax Credit for Scholarship Contributions

In 2027, a new tax credit of up to $1,700 will be available to taxpayers contributing to eligible scholarship-granting organizations that support students at private or religious K–12 schools. This credit will apply regardless of whether the taxpayer itemizes deductions, creating a new incentive for education-focused giving.

Corporate Deduction Floor Introduced

Corporate charitable giving will also be affected. Beginning in 2026, businesses can only deduct charitable donations that exceed 1% of taxable income, up to a ceiling of 10%. This change could encourage larger or multi-year giving commitments from corporate partners but may also require not-for-profits to adjust their approach to sponsorship and corporate engagement.

What These Changes Mean for Not-for-Profits

The new rules create both challenges and opportunities for not-for-profit organizations. While they may increase participation among smaller, non-itemizing donors, they could also complicate giving strategies for major donors and corporate partners. Strategic planning will be essential to help not-for-profits maintain balance across their donor bases.

1. Engaging Everyday Donors

The reinstated universal deduction for non-itemizers provides an opportunity to engage a wider pool of small donors. Not-for-profits should build fundraising campaigns that highlight how even modest contributions now carry tangible tax benefits. Messaging that connects giving directly to impact, such as “Your $100 gift not only supports our mission but is now tax-deductible”, can inspire participation from new supporters.

The upcoming scholarship tax credit also opens doors for organizations connected to education or youth programs. Communicating this new benefit early can help donors plan ahead and strengthen relationships with supporters interested in education equity.

2. Planning for Itemizers and Major Donors

For high-income donors and those who itemize, the 0.5% deduction floor and top-tier reduction may prompt new giving strategies. Fundraisers should be ready to discuss “bunching”, a method where donors concentrate multiple years of charitable giving into one tax year to exceed deduction thresholds and maximize impact.

Not-for-profits can also encourage legacy giving and planned gifts as donors evaluate long-term financial strategies. With the Act’s increase in estate and gift tax exemptions to $15 million for individuals and $30 million for couples, there’s greater opportunity for philanthropic estate planning that aligns with organizational sustainability goals.

3. Strengthening Corporate Partnerships

The new 1% minimum for deductible corporate giving means businesses will need to contribute at least that share of taxable income to qualify. Not-for-profits should position themselves as strategic partners by proposing multi-year sponsorships, collaborative campaigns, or pooled giving initiatives that help corporate donors meet thresholds while achieving meaningful community outcomes.

This shift may also prompt companies to become more intentional in selecting not-for-profit partners, valuing transparency, measurable results, and mission alignment more than ever before.

Turning Policy Changes into Strategic Opportunity

The OBBBA reforms introduce a mix of opportunities and challenges for the not-for-profit sector. While the expanded universal deduction could increase small-donor giving, the new floors and limits may temper large-scale contributions. Success in this new environment will depend on thoughtful, proactive engagement.

Not-for-profits should begin scenario planning now, reviewing donor data, updating messaging, and educating their supporters about how the rules will affect them. Creating segmented outreach strategies for small donors, major donors, and corporate partners will help organizations adapt smoothly to the evolving landscape.

How De Boer, Baumann & Company Can Help

At De Boer, Baumann & Company, we help not-for-profit navigate the complex intersection of tax regulation, fundraising, and financial strategy. Our team works alongside not-for-profit leaders to understand the implications of legislative changes, model potential impacts, and develop proactive approaches to donor engagement and compliance.

We partner with organizations to ensure they are prepared for what’s next, so they can continue focusing on what matters most: advancing their missions and strengthening their communities.

To read the full article by Timothy J. McClimon, please visit Forbes.

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Facebook and Volunteer Engagement: Maximizing Opportunity While Managing Risk

In an era of rapid social media change, it’s easy to overlook Facebook in favor of newer platforms like TikTok or Instagram. Yet despite its age, Facebook remains one of the most powerful communication tools available to nonprofits. According to the Pew Research Center, roughly seven in ten U.S. adults still use Facebook, making …

In an era of rapid social media change, it’s easy to overlook Facebook in favor of newer platforms like TikTok or Instagram. Yet despite its age, Facebook remains one of the most powerful communication tools available to nonprofits. According to the Pew Research Center, roughly seven in ten U.S. adults still use Facebook, making it one of the most widely used social platforms in the country.

For organizations seeking to connect with supporters, mobilize volunteers, and strengthen community engagement, Facebook continues to offer immense value. However, it also poses distinct challenges, particularly around data privacy, audience reach, and platform ethics. Understanding how to balance these opportunities and risks can help nonprofits make the most of this enduring digital space.

Leveraging Facebook for Volunteer Recruitment

With 96% of nonprofits maintaining a Facebook presence, the platform remains a vital recruitment tool. To use it effectively, nonprofits should first ensure that managing Facebook activity is a defined part of someone’s job responsibilities. Consistent posting and engagement are key to staying visible in followers’ feeds.

When posting volunteer opportunities, framing matters. Each post should connect volunteer participation directly to the organization’s mission or cause.

Deadlines, incentives, and timely messaging all help spark action. Even for ongoing opportunities, creating urgency, like “Sign up by December 1 to receive a volunteer welcome kit”, can boost engagement. Nonprofits can also expand their reach by cross-posting opportunities on networks such as VolunteerMatch or local community Facebook groups.

Another effective tactic is to personalize posts. Staff or volunteer coordinators can use their own voices to make posts more relatable: “I’ll be at our river cleanup this weekend, join me in making a difference!” This approach humanizes the organization and fosters a stronger sense of connection with prospective volunteers.

Finally, using Facebook’s event tools to promote volunteer days or training sessions can drive interest. Posts should link directly to the organization’s own “Volunteer With Us” webpage rather than relying on Facebook Messenger for sign-ups, ensuring a smoother and more secure experience.

Retaining and Recognizing Volunteers

Recruitment is only half the equation. Once volunteers are on board, maintaining engagement is just as important, and Facebook can be a useful tool for this as well.

Nonprofits that collaborate with partner or “affinity” organizations, such as churches, service clubs, alumni groups, or local businesses, should follow and tag those partners on Facebook when posting volunteer updates. Tagging these organizations acknowledges their contributions and helps extend the post’s reach to broader audiences.

Encouraging volunteers to share their own photos or reflections on social media also deepens engagement. For example, a volunteer might post a picture from a community event and tag both the nonprofit and their affinity group, inspiring others to get involved.

Organizations can strengthen volunteer relationships through personalized gestures online: posting birthday wishes (with consent), tagging volunteers in event photos, or simply “liking” their posts. These small actions build connection and demonstrate appreciation, helping to sustain long-term involvement.

Protecting Volunteer Privacy

While social media helps build community, it can also expose volunteers to unwanted visibility. Nonprofits should take proactive steps to protect their supporters’ privacy and data.

  • Avoid collecting personal information directly on Facebook. Instead, direct interested individuals to a secure volunteer sign-up form on your organization’s website.

  • Obtain written consent before sharing photos or tagging volunteers. This not only ensures compliance with privacy standards but also respects individual comfort levels.

  • Include a social media permission section in volunteer applications. This form can outline how photos, names, or stories might be used in newsletters or online platforms, allowing volunteers to choose the level of exposure they’re comfortable with.

While no process can eliminate all risks, establishing clear boundaries and policies helps make social media engagement safer for both the organization and its volunteers.

The Evolving Role of Social Media in Volunteerism

Volunteer management practices have changed dramatically over the years. Where once volunteer lists were built manually from local directories, nonprofits now use digital tools to connect with supporters worldwide. Yet the core principles remain the same: consistent communication, recognition, and trust-building are still at the heart of successful volunteer engagement.

Even as new social media platforms rise and fall in popularity, Facebook continues to be an essential part of many nonprofits’ outreach and volunteer recruitment strategies. Understanding the platform’s strengths, and navigating its challenges responsibly, can help organizations expand their reach, strengthen relationships, and grow their capacity for impact.

How De Boer, Baumann & Company Can Help

At De Boer, Baumann & Company, we know that volunteer engagement is central to a nonprofit’s success. Our team helps organizations strengthen operational strategies, from financial planning to program development and digital engagement.

We partner with nonprofits to navigate evolving challenges, whether that means adopting new technology, maintaining compliance, or building systems that support sustainable growth. By combining practical expertise with a deep understanding of the nonprofit landscape, we help organizations focus on what truly matters: advancing their missions and serving their communities.

To read the full article by Jan Masaoka, please visit Nonprofit Quarterly.

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Navigating What’s Next: Legislative Opportunities and Challenges for Not-for-Profits

As Congress moves beyond the “One Big Beautiful Bill Act” (OBBBA), a new wave of legislative priorities is beginning to take shape. These shifting dynamics present both opportunities and challenges for not-for-profit organizations, especially as the federal government revisits tax policy, funding decisions, and regulatory reform. For not-for-profits that engaged in advocacy during OBBBA’s …

As Congress moves beyond the “One Big Beautiful Bill Act” (OBBBA), a new wave of legislative priorities is beginning to take shape. These shifting dynamics present both opportunities and challenges for not-for-profit organizations, especially as the federal government revisits tax policy, funding decisions, and regulatory reform.

For not-for-profits that engaged in advocacy during OBBBA’s development, there are valuable lessons to carry forward. Strategic communication and proactive engagement helped the sector secure meaningful wins, including the removal of several proposed tax hikes and the establishment of a permanent charitable deduction for non-itemizing taxpayers. Those same tactics will be critical as not-for-profits face the next round of policy debates on Capitol Hill.

Lessons from the OBBBA Experience

When OBBBA was under consideration, not-for-profits faced potential tax provisions that could have significantly reduced the resources available for mission-driven work. Through coordinated outreach and clear messaging, the sector helped lawmakers understand how additional taxes, such as those on private foundations and employee parking benefits, would negatively affect their ability to serve communities.

The result was a favorable outcome: proposed tax increases were removed, and a permanent charitable deduction was secured for the 90% of taxpayers who do not itemize their returns. This achievement underscored how effective storytelling and sector-wide advocacy can shape legislative outcomes in ways that strengthen philanthropy and community investment.

Renewed Legislative and Tax Policy Risks

While the OBBBA chapter has closed, the possibility of renewed legislative threats remains. Congressional tax committee leaders have indicated that certain tax measures removed from the bill could resurface in future discussions, potentially aimed at raising federal revenue through changes to the tax-exempt sector.

At the same time, increased scrutiny of not-for-profits by both Congress and the White House has created a more cautious political environment. Organizations should be prepared for heightened oversight, expanded reporting expectations, and new compliance requirements that could emerge as part of broader fiscal reform efforts.

IRS Reform: A Double-Edged Sword

Lawmakers are also considering an Internal Revenue Service (IRS) reform package, one that could have both positive and challenging implications for charitable organizations.

On the positive side, reform could simplify tax filing for 501(c)(3)s, reduce administrative delays, and strengthen donor privacy protections. However, critics of the not-for-profit sector may push for additional disclosure requirements, including the reporting of foreign donations or international grantmaking data.

There is also discussion around potential changes to Form 990, the core financial disclosure document for not-for-profits. While reform could bring useful modernization and transparency, poorly designed amendments could also increase administrative burden and compliance costs.

Potential Progress on Retirement and Giving Incentives

One area that may offer bipartisan cooperation is retirement reform. Lawmakers are considering proposals that could support not-for-profit employees and encourage greater charitable participation.

This may include enhancements to 403(b) retirement accounts and adjustments that allow individuals with IRAs to make charitable contributions through donor-advised funds more easily. If these proposals gain traction, they could help not-for-profits attract and retain talent while also promoting philanthropy among donors.

The Importance of Advocacy and Engagement

Not-for-profits operating in today’s political environment face both heightened scrutiny and new opportunities to shape policy. Advocacy will play a central role in determining which direction future legislation takes.

During OBBBA negotiations, the not-for-profit sector’s unified, fact-based approach helped remove several unfavorable provisions and secure lasting charitable incentives. That success demonstrates the power of consistent, constructive engagement. As Congress revisits fiscal and tax policy in the months ahead, not-for-profits must continue to advocate early, collaborate with allies, and present practical policy solutions that highlight their community impact.

By engaging lawmakers in a proactive and solutions-focused manner, not-for-profits can ensure their perspectives are included in policy decisions that directly affect their missions.

How De Boer, Baumann & Company Can Help

At De Boer, Baumann & Company, we understand that legislative changes can have significant implications for not-for-profit organizations. Our team helps clients interpret emerging policy developments, assess financial risks and opportunities, and plan strategically in response to evolving regulations.

By staying informed and engaged, not-for-profits can navigate uncertainty with confidence, protecting their resources, strengthening compliance, and continuing to deliver vital services to the communities they serve.

To read the full article by Geoffrey Paul, please visit The NonProfit Times.

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Harnessing AI: Unlocking Opportunities for Not-for-Profits of All Sizes

Each year, the world loses roughly 32 million acres of natural forest, an area comparable to the entire state of Florida. Much of this destruction results from illegal logging, contributing to climate change and increasing the likelihood of diseases spreading between animals and humans. Addressing deforestation is a complex, global challenge, but one innovative …

Each year, the world loses roughly 32 million acres of natural forest, an area comparable to the entire state of Florida. Much of this destruction results from illegal logging, contributing to climate change and increasing the likelihood of diseases spreading between animals and humans. Addressing deforestation is a complex, global challenge, but one innovative not-for-profit has demonstrated that technology and creativity can offer a path forward.

Protecting Forests Through AI and Sound

Rainforest Connection, a not-for-profit based in Katy, Texas, developed a unique approach that leverages artificial intelligence (AI) and audio technology to combat illegal deforestation. Their system uses solar-powered recorders to continuously capture the natural sounds of the forest. These recordings are uploaded to the cloud, where an AI model analyzes the data to detect and even predict illegal logging activity.

What makes this approach groundbreaking is its predictive power. The AI can forecast where illegal logging is likely to occur up to five days in advance, with an accuracy rate of 96%. Experts estimate that widespread adoption of similar technologies could reduce illegal logging by as much as 35% globally.

AI’s Expanding Role in Social Good

Rainforest Connection’s work is just one example of how AI can be harnessed for positive change. The Nature Conservancy has deployed AI and camera systems to detect invasive species before they spread. The American Red Cross integrates AI and satellite imagery to assess disaster-related infrastructure damage. Similarly, the International Fund for Agricultural Development (IFAD) uses AI to analyze data, improve insights, and more effectively target assistance to vulnerable communities.

The potential applications of AI for mission-driven organizations are vast. As the technology evolves faster than any innovation before it, not-for-profits have a remarkable opportunity to responsibly integrate AI to enhance impact, improve efficiency, and strengthen fundraising and outreach.

Understanding AI Adoption in the Not-for-Profit Sector

Despite its potential, AI adoption among not-for-profits remains limited. A survey conducted by Google for Not-for-Profits, which included responses from 4,600 not-for-profit professionals, revealed that while 80% of managers believe AI could apply to their work, two-thirds identified a lack of familiarity as the primary barrier to adoption. Many organizations use AI tools for individual tasks but have not yet implemented them organization-wide.

Larger organizations may have more resources to explore AI, but smaller not-for-profits can also benefit significantly. Generally, not-for-profits can approach AI integration in two ways:

  1. Using Software-as-a-Service (SaaS) AI-powered solutions to enhance specific functions.

  2. Building custom AI tools and ecosystems to address mission-critical challenges.

Using Software-as-a-Service AI

The growing marketplace of AI-enabled SaaS platforms offers accessible entry points for not-for-profits. These tools can optimize operations, strengthen donor engagement, and reduce manual workloads, all without requiring specialized technical expertise or major investments.

Examples include:

  • Donor and relationship management: Platforms like HubSpot and Salesforce offer AI-powered CRM systems that help automate fundraising efforts, personalize communications, and track donor interactions more effectively.

  • Content creation and marketing: Tools such as Jasper AI, Writesonic, and Surfer SEO assist in generating professional content and improving visibility across digital channels.

  • Productivity and collaboration: Applications like Notion, Otter, Coda, and Taskade increase organizational efficiency by streamlining workflows and documentation.

  • Communication and coordination: AI-enhanced collaboration platforms such as Slack and Microsoft Teams help improve real-time engagement and information sharing.

  • Project management: Solutions like Asana and Trello integrate AI features that automate task prioritization and project tracking.

  • Creative design and media: Tools such as Canva, Adobe Firefly, Runway, and Pictory AI make it easier to develop visual and video materials for campaigns.

  • Generative AI assistants: Platforms like ChatGPT, Microsoft Copilot, Google Gemini, Meta AI, and Anthropic’s Claude provide intuitive chat interfaces that function as personal digital assistants, helping staff with research, communication, and administrative work.

 

By adopting these tools, even small and mid-sized not-for-profits can modernize operations, conserve resources, and improve overall efficiency. However, successful implementation requires adequate training and thoughtful change management to ensure staff are comfortable and confident using these technologies.

Building Custom AI Solutions to Maximize Impact

For organizations ready to take a deeper step into AI integration, building custom solutions can transform how they deliver their missions. These initiatives often involve tailoring AI applications or combining existing tools to address unique challenges faced by the organization.

Step 1: Define the Problem Creatively

The foundation of any successful AI initiative is identifying the right problem to solve. By rethinking traditional approaches, staff can discover innovative use cases where AI can make a meaningful difference. This stage requires open-mindedness, questioning long-standing processes, and imagining how they might evolve with technology. The creativity behind this step often determines the level of impact achieved.

Step 2: Experiment and Test

Once potential applications are identified, organizations should start small. A culture of experimentation allows teams to test ideas through low-cost proof-of-concept projects before committing extensive resources. This iterative approach helps refine solutions, uncover new insights from data, and reduce the risks of full-scale implementation.

Step 3: Engage Technical Expertise

Smaller not-for-profits may not have in-house data scientists or AI engineers, but they can still access technical talent in creative ways:

  • Volunteers: Recruit volunteers with AI or data backgrounds to assist in developing proof-of-concept solutions.

  • Student partnerships: Collaborate with universities through capstone projects, internships, or student innovation clubs interested in real-world problem-solving.

  • Pro bono partnerships: Some technology firms are open to supporting not-for-profit initiatives by donating staff time or expertise, particularly when there’s clear alignment with the organization’s mission.

  • Hackathons: Hosting or joining hackathons can help generate innovative solutions quickly while building connections with skilled technologists and potential long-term collaborators.

 

Before engaging technical partners, it’s essential to define the project’s scope, objectives, and data requirements to ensure feasibility and alignment with organizational goals.

Establishing Responsible AI Policies

As not-for-profits explore AI, it’s important to implement policies that promote ethical, transparent, and mission-aligned use of technology. Larger organizations may formalize comprehensive AI governance frameworks, while smaller ones can start by setting clear boundaries for acceptable use.

A responsible AI policy typically includes:

  • Ethical guidelines and accountability measures.

  • Compliance with regulatory and privacy requirements.

  • Safeguards for data security and confidentiality.

  • Defined risk management protocols.

 

Such policies foster trust among stakeholders and ensure that innovation aligns with organizational values. They also promote awareness and training, helping staff understand both the capabilities and limitations of AI systems.

An organization’s approach to AI should reflect its culture and tolerance for risk. Some may adopt a cautious, conservative stance, while others embrace experimentation. A well-designed policy provides flexibility while maintaining integrity and transparency.

Managing Change and Designing for People

As organizations grow in their AI journey, managing the human side of technological transformation becomes essential.

Change management ensures that staff adopt and effectively use new tools. AI solutions often require shifts in workflow or responsibilities, and employees may initially be skeptical of their outcomes. Successful change management includes transparent communication, clear expectations, and hands-on training to build trust in the new systems.

Human-factored design is equally critical. AI tools should complement human judgment, not replace it. Designing systems that are intuitive, ethical, and accessible helps ensure staff can override or adjust AI recommendations when necessary. Involving end-users early in the design process leads to higher adoption rates and better outcomes.

Looking Ahead

Artificial intelligence is becoming more visible across the not-for-profit sector, and many organizations are beginning to explore how these tools might fit into their work. While AI is still developing, staying aware of emerging trends can help leaders make thoughtful, informed decisions as the landscape evolves.

At De Boer, Baumann & Company, we continue to follow developments that may affect the not-for-profit community. Understanding which changes are relevant, which can be set aside, and how new tools may influence operations in the future can help organizations stay adaptable and prepared.

To read the full article by Sajit Joseph, please visit The NonProfit Times.

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