Children's Hospital CEO Warns of Tax Impact on Donations
The leader of Seattle Children's Hospital cautions that a state income tax cap could discourage essential charitable giving.
Updated on Oct. 20, 2026 in Philanthropy
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Seattle Children's Hospital CEO warns that Washington's upcoming 9.9 percent income tax could reduce critical charitable contributions. Voters are set to decide the future of the state's tax policy in the November 3 election.
Why it matters
The hospital relies on large private gifts to cover medical care and research costs not fully funded by Medicaid reimbursements. Capping charitable deductions creates a financial disincentive for the high-impact donors who support these vital services.
Seattle Children's Hospital received $253 million in record donations in 2025, with $23 million earmarked for uncompensated care. Roughly 85 percent of those individual contributions were under $100.
The players
Seattle Children's Hospital
This major medical institution recorded more than 600,000 patient visits in 2025 and provides specialized pediatric care and research services.
The details
The state's income tax policy includes a $1 million standard deduction and limits charitable write-offs to $100,000 per person. Tax advisers are reportedly suggesting that wealthy former residents establish residency in other states to avoid the new levy.
Timeline
In 2025, donors contributed $23 million to the hospital for uncompensated care.
On Nov. 3, 2026, Washington voters will decide the I-645 income tax repeal.
The new 9.9% state income tax is scheduled to begin Jan. 1, 2028.
Initial tax payments and returns are set to begin in 2029.
Market Landscape
This debate mirrors broader trends in state-level fiscal policy where new income taxes compete against established models of charitable incentive structures. The outcome of Initiative 645 will define the competitive landscape for non-profit fundraising in Washington for years to come.
While 85 percent of donations currently fall under the $100 threshold, high-impact donors may shift their giving strategies to account for the new deduction limits. These changes could affect the long-term sustainability of uncompensated care programs at the state's largest children's hospital.
The takeaway
Donors looking to maximize their impact may need to reassess their tax planning strategies ahead of potential changes to state laws. Consulting with a professional tax adviser can help navigate the implications of the new income tax cap on charitable giving.
Further reading
Learn more about local giving trends on the Washington Philanthropy section.
Live Poll
Do you support tax policies that limit deductions for charitable donations to local non-profit organizations?
