State of Good for July 20, 2026

by | Jul 20, 2026

Weekly insights on donor behavior, industry trends, and what’s shaping generosity
⏱️ 9 minutes | Once a week

This Week's State of Good

This week’s brief covers a funding model experiment worth watching, a regulatory proposal with implications for education nonprofits, and fresh data on a donor segment that may be hiding in plain sight in your database. Plus, new research on what’s actually working (and not working) with Gen Z donors, and a statewide giving campaign that shows what collaboration can accomplish.

Foundations Are Rethinking How Money Flows

I’ve sat on both sides of the grant table, and I can tell you the traditional program-based funding model has always created a quiet tension: nonprofits design programs to fit funder requirements, then spend enormous energy reporting on activities rather than results.

That’s why an experiment out of New Jersey caught my attention this week. A foundation there tried something different, paying grantees for results instead of programs, and the early returns are notable. According to the Chronicle of Philanthropy, the shift unleashed greater creativity among grantees and produced improved outcomes.

The logic is straightforward: when funders define the destination but not the route, organizations closest to the work get to use their expertise on how to get there. Grantees stopped contorting their programs to fit application templates and started solving problems the way they actually knew how.

This is one foundation, not a movement, yet. But outcome-focused grantmaking has been gaining conversation among funders, and experiments like this one tend to get studied and replicated when they work.

What This Means for You:

  • Start building outcome measurement into your programs now, before a funder requires it. Organizations that can already demonstrate results will be first in line if this model spreads.
  • In your next grant application, lead with outcomes even if the funder asks for activities. It differentiates you.
  • If you have a strong foundation relationship, consider proposing a results-based pilot yourself. Funders experimenting with new models need willing partners.

The Middle of Your Donor File Deserves a Second Look

Most fundraising shops are structured as a barbell: a major gifts officer at one end, a mass-appeal annual fund program at the other, and a thin layer of attention in between. New analysis from AFP, drawing on the Fundraising Effectiveness Project’s Q3 2025 report, suggests that middle tier is exactly where organizations should be looking.

The FEP data shows where new donation dollars are (and aren’t) coming from, and mid-level donors emerge as a segment with distinct giving patterns that most organizations aren’t cultivating with any intentionality.

Here’s what I’ve seen across thousands of campaigns: mid-level donors are usually treated as “annual fund donors who happen to give more.” They get the same email appeals, the same generic thank-yous, the same year-end letter. But behaviorally, they’re often something else entirely, future major donors testing your organization, or deeply committed supporters giving at their genuine capacity. Either way, they warrant a strategy, not a segment code.

What This Means for You:

  • Pull your donor file and define your mid-level band (often somewhere between your annual fund ceiling and major gift floor). Count how many donors live there and what they gave last year. The total usually surprises people.
  • Assign someone (even part of one person’s portfolio) to steward this group personally. A phone call, not a mail merge.
  • Create one communication piece this quarter designed specifically for mid-level donors: deeper impact reporting than the annual fund gets, without the full major-donor treatment.

A Regulatory Development for Education Nonprofits

The IRS has proposed new regulations that would amend existing rules under Section 501(c)(3) to clarify that certain schools that discriminate on the basis of race are not operated exclusively for charitable purposes, according to a notice from the Office of Management and Budget’s Office of Information and Regulatory Affairs.

The practical stakes here are significant for any organization in the education space: 501(c)(3) status is the foundation of tax-deductible giving. An institution that loses it loses the deductibility incentive for its donors, along with a range of other operational benefits tied to exempt status.

The specific proposed language hasn’t been fully detailed yet, this is at the notice stage, but the direction is clear: the IRS is sharpening its focus on how “charitable purpose” is defined and enforced for educational institutions.

Even if your organization isn’t a school, this is worth watching. Regulatory clarifications around charitable purpose requirements tend to signal broader scrutiny of how nonprofits demonstrate alignment between their operations and their exempt purpose.

What This Means for You:

  • Education institutions should have counsel review the proposed regulations when the full text is published and monitor the public comment period.
  • All nonprofits should treat this as a reminder to periodically audit how your actual operations map to your stated charitable purpose. Documentation matters.
  • If you fundraise for or partner with educational institutions, build compliance questions into your due diligence.

Why Donors Give?

What happens when you test fundraising tactics against actual behavior, not just what donors say they’ll do?

New research highlighted by AFP examined how familiar fundraising tactics perform with Gen Z donors who already have experience giving to international nonprofits. Critically, this was not an “intent to donate” study, researchers observed real giving choices, which makes the findings far more reliable than the survey-based research that dominates this space.

The headline: tactics that have reliably worked for decades appear to be losing ground with this generation.

The psychology here is worth understanding. Gen Z came of age in an environment saturated with marketing, and they’ve developed sophisticated filters for persuasion techniques. Appeals that feel formulaic, the urgent deadline, the matching gift countdown, the guilt-adjacent imagery, can register as manipulation rather than invitation. For a generation that prizes authenticity and can spot a template at fifty paces, the familiar playbook may actively work against you.

The deeper lesson: what donors say motivates them and what actually drives their giving are often different things. Behavioral data beats stated preference every time.

Try This:

  • Audit your appeals aimed at younger donors. If a tactic feels like a “fundraising tactic,” test an alternative.
  • A/B test with behavior, not opinion. Track actual conversion, not survey responses or focus group feedback.
  • Lead with transparency and specificity — younger donors respond to knowing exactly where money goes.
  • Don’t abandon proven tactics for older segments based on this research. Segment by generation and test accordingly.

Source: AFP Global

💡 Pure Charity’s Fundraisers features can be used to track specific segments and campaigns to provide insight into differences in generational giving to your nonprofit.

Bottom Line

This week’s takeaway: The common thread this week is the gap between how things have always been done and what the evidence now shows. Funders are experimenting with new models, regulators are refining old definitions, and donor data keeps revealing opportunities sitting in the middle of files we thought we knew. The organizations that win in this environment aren’t the ones with the biggest budgets,  they’re the ones willing to look at their own assumptions with fresh eyes.

Three actions for this week:

  1. Audit one assumption. Pick a tactic, segment, or program structure you’ve run the same way for three-plus years and pull the data on whether it’s still performing.
  2. Look at your middle. Identify the donors between your annual fund and major gifts programs and sketch a 90-day stewardship plan for them.
  3. Check your compliance posture. Spend 30 minutes confirming your operations still map cleanly to your stated charitable purpose — and calendar an annual review if you don’t have one.

💡 Pure Charity can support your 2026 Fundraising Strategies.

 Reach out, and we can discuss.

Stories of Good

Sometimes the best fundraising story isn’t about one organization, it’s about an entire state pulling in the same direction.

The Utah Nonprofits Association released its UTAHGIVES 2026 report, documenting the results of its statewide giving campaign. What stands out isn’t just the outcome, it’s how they got there. The campaign’s success was built on collaboration among nonprofit leaders, community partners, and volunteers, all rallying around a shared moment rather than competing for attention.

Having helped build regional giving days myself, I can tell you this is harder than it looks. Every participating organization has to believe that a rising tide lifts all boats, and then behave that way. Utah’s nonprofit community did, and the results speak for themselves.

The Lesson: Collaborative campaigns work because they change the question donors are asked, from “will you support us?” to “will you support your community?” If your region doesn’t have a giving day, you might be the one to start the conversation. If it does, show up fully. Shared moments create momentum no single organization can generate alone.