Charitable Giving Is Changing in 2026 — Why Individuals Should Revisit Their Strategy in 2025

Significant provisions of the One Big Beautiful Bill (OBBB) are scheduled to come into force on January 1, 2026. Among the most noteworthy changes are those affecting the tax treatment of charitable giving. For individuals who donate regularly—or are considering larger gifts in the near term—understanding these adjustments is critical to preserving the tax value of their contributions. 

Beginning in 2026, taxpayers claiming the standard deduction will once again be eligible for a limited above-the-line charitable deduction:

• Up to $1,000 for single filers
  
  

• Up to $2,000 for joint filers
  
  

This represents a meaningful shift for everyday donors who do not itemize. For the first time since the temporary pandemic-era provisions, non-itemizers will receive a modest tax benefit for supporting charitable causes.

Higher-income individuals who itemize their deductions will face new restrictions. Under the OBBB framework, the maximum marginal tax savings from charitable giving decreases—from 37% today to 35% in 2026 for top-bracket taxpayers. While the percentage change appears small, it meaningfully affects the efficiency of larger gifts and multiyear giving strategies. 

Beginning in 2026, only contributions exceeding 0.5% of adjusted gross income (AGI) will be deductible.
Example: A taxpayer with $100,000 AGI must contribute more than $500 before any amount generates a tax deduction.

This rule particularly affects moderate-income donors and those who make multiple small donations throughout the year.

With these shifts approaching, 2025 becomes a pivotal year for planning. Gifts completed before December 31, 2025, are subject to the current rules—offering potentially stronger tax benefits compared to what will be available in 2026.

Taxpayers may wish to consider:

• Accelerating Planned Giving

Individuals intending to make significant charitable contributions over the next few years may achieve greater tax value by completing—or pre-funding—those gifts in 2025.

• Utilizing Donor-Advised Funds (DAFs)

DAFs continue to offer flexibility for donors who want to secure a deduction now while distributing funds to charities over time. Pre-funding a DAF in 2025 can be particularly attractive for those who expect to itemize this year but anticipate reduced benefits in 2026.

• Multi-Year Giving Plans

Those following structured or recurring giving plans may want to revisit timing, especially if they anticipate a higher taxable income in 2025 or expect to fall into the AGI-floor constraints starting in 2026.

While the reintroduction of a limited above-the-line deduction is a welcome development for non-itemizers, the overall framework introduced in 2026 is more restrictive. The combination of tighter limits for itemizers and the new AGI floor reduces the after-tax benefit of charitable giving for many taxpayers.

Given these shifts, thoughtful planning throughout 2025 can help donors preserve the value of their contributions and align their giving with long-term financial goals.

If you have questions about how the OBBB changes may affect your charitable or broader tax strategy, our team is here to help you navigate these developments with confidence.