What the OBBB Means for Charitable Giving in 2026 I Why Your Giving Strategy May Need a Second Look
For many families, charitable giving is deeply personal—it reflects values, legacy, and the desire to make a meaningful impact.
But beginning in 2026, the One Big Beautiful Bill (OBBB) changes how charitable contributions are treated from a tax perspective. And while the intent isn’t to discourage giving, it does change how—and when—giving may be most effective from a planning standpoint.
The takeaway: your giving strategy may need to become more intentional.
What’s changing in 2026
The OBBB introduces several new rules that directly affect charitable deductions:
1. A new 0.5% AGI “floor” for itemizers
Starting in 2026, charitable contributions are only deductible to the extent they exceed 0.5% of your adjusted gross income (AGI).
- Example: If your AGI is $500,000, the first $2,500 of giving provides no tax deduction
- This primarily impacts smaller or routine annual gifts
2. Reduced tax benefit for high-income earners
For those in the top tax bracket, the value of deductions is capped at 35% instead of 37%.
- A $10,000 donation may now generate $3,500 in tax savings instead of $3,700
- The deduction still exists—but it’s slightly less valuable
3. A new deduction for non-itemizers
For taxpayers who take the standard deduction, there is now a modest charitable write-off:
- Up to $1,000 (single) or $2,000 (married filing jointly)
- Applies only to direct cash gifts (not donor-advised funds or private foundations)
This is a positive change—but relatively limited in scope.
4. Additional limits for corporations
Businesses will also face a new rule:
- Only contributions exceeding 1% of taxable income are deductible
Why this matters
These changes don’t eliminate the benefits of charitable giving—but they do reshape the strategy.
For many families, this means:
- Smaller annual gifts may no longer generate meaningful tax benefits
- Larger gifts may need to be timed more strategically
- High-income households may see reduced tax efficiency per dollar given
In short, charitable giving becomes less about what you give each year and more about how you structure it over time.
Planning opportunities to consider
While the rules are tighter, there are still smart ways to give:
Bunching contributions
Combining multiple years of giving into one year may help exceed the 0.5% AGI threshold and maximize deductions.
Donating appreciated assets
Gifting stocks or other appreciated investments can still provide:
- A charitable deduction (subject to new rules)
- Avoidance of capital gains tax
Qualified charitable distributions (QCDs)
For those over age 70½, QCDs remain a powerful way to give directly from retirement accounts—often outside of these new limitations.
Coordinating with income events
Timing charitable gifts around:
- Roth conversions
- Business sales
- Bonus income
can improve overall tax efficiency.
The bigger picture
Charitable giving has never been just about taxes.
But tax efficiency does matter—because it allows you to give more, with less friction, and align your generosity with your broader financial plan.
With the OBBB changes taking effect in 2026, the families who benefit most will be those who:
- Plan ahead
- Coordinate giving with income and tax strategy
- Take a more structured approach to philanthropy
A helpful next step
If charitable giving is part of your plan, this is a good time to revisit your strategy.
We can help you evaluate how these new rules impact your situation—and coordinate your giving with your broader tax, investment, and estate planning strategy so everything works together.
Disclosure: This material is for informational purposes only and should not be considered tax advice. Please consult your CPA for guidance specific to your situation.