The future of giving in Aotearoa New Zealand

A structural shift in giving settings

Budget 2026 introduced one of the most significant changes to New Zealand’s philanthropic tax framework in nearly two decades.

The introduction of a $100,000 annual cap on eligible donations for the donation tax credit fundamentally alters how incentives operate at scale. While the 33.33 percent tax credit remains unchanged, the new ceiling means the maximum annual credit is effectively limited to $33,333.

Historically, New Zealand’s framework allowed donation tax credits to scale alongside income, enabling large gifts to attract proportional tax relief, however that position has now shifted.

This budget announcement is more than a technical amendment, it represents a recalibration of how public support is applied to philanthropy, particularly at the upper end of giving.

What is changing and why it matters

Key policy changes:

• Eligible donations capped at $100,000 per individual per year
• Tax credit rate remains at 33.33 percent
• Maximum annual credit of $33,333
• Changes expected to apply from 1 April 2027

The deeper implication could be behavioural, not just tax related

From a purely fiscal perspective, the number of directly affected donors is relatively small. Treasury material indicates this impacts only a narrow cohort of 350 high-value givers, however, this group contributes a disproportionate share of total philanthropic capital at >$100m.  

Ultimately, the key question is not how many donors are affected, but how their behaviour may change. We know already from research¹ that fundraising growth for charities is increasingly tied to exceptional gifts, for organisations whose fundraising income increased in 2025, 60% of attributed growth came from exceptional gifts. Will this behaviour change now?

Insights for us to consider:

1. The re-timing of giving:  will large one-off gifts become less common, with donors instead spreading contributions across multiple years and structuring giving to align with the annual cap?

Pressure on large-scale fundraising inflows, means there is a credible risk that fewer large single-year gifts are made and that donations become more fragmented. This does not necessarily reduce total giving, but it changes its composition and timing.

2. The re-pricing of generosity: once the marginal tax benefit is removed above $100,000, will the economics of large gifts change, particularly for tax-sensitive driven donors?

Slower gifting where organisations reliant on major gifts, endowment capital, investment-led income may see slower growth in their capital base derived from donor led incoming gifts. Over time, this may translate into lower distributable income and reduced long-term funding resilience.

3. The re-focusing of philanthropy: in many cases, giving decisions may rely more heavily on personal values, impact outcomes, and relationship with charitable organisations.

There may be inequality across the sector as not all organisations will experience the impact equally. Charities who have larger strategically invested endowment funds, with clear distribution policy, may remain relatively insulated, whereas the annual fundraising-dependent charities may face greater volatility in larger giving income.

Implications for major donors and high net wealth New Zealanders

For private clients considering their long-term giving strategies, the implications are equally significant.

Intergenerational planning becomes more important as the new $100,000 cap reinforces the role of gifts in wills, estate-based philanthropy, and intergenerational wealth transfer, as these structures sit outside the annual constraint and may become increasingly central to legacy planning. Structured giving gains relevance and we may see an increased use of multi-year giving, staged giving or blended giving models allowing donors to maintain their commitment levels while adapting to the new settings.

Our Craigs Investment Partners adviser conversations will continue to evolve and increasingly play a more important role in helping clients navigate timing decisions, awareness of giving structures, and alignment between wealth, purpose, and impact.

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References

▪ 1 The Blackbaud Institute 2025

▪ Budget 2026 overview – The Treasury

▪ Inland Revenue, Charities and Not-for-profits Information Sheet (28 May 2026)

▪ Taxation (Budget Measures) Bill No. 3 (28 May 2026)

▪ Government press release on improving tax rules for charities (28 May 2026)