The One Big Beautiful Bill Act brought sweeping changes to the tax code—and changes to charitable giving was no exception. If you’re wondering how this affects you, you’re not alone.
Here are the key charitable giving changes in the new law that every donor should know:
NEW Universal Charitable Deduction
Most Americans take the standard deduction and don’t itemize their tax returns—meaning they typically haven’t been able to deduct charitable donations. That changed in 2020 with the introduction of the temporary Universal Charitable Deduction, which allowed non-itemizers to deduct up to $150 (single filers) or $300 (joint filers). Now, the Big Beautiful Bill has made this benefit permanent and has raised the deduction limits to $1,000 for single filers and $2,000 for joint filers.
NEW 0.5% AGI Floor
For those itemizing their returns, a new floor will require them to contribute more than 0.5% of their Adjusted Gross Income (AGI) before being able to claim a deduction.
For individuals wanting to itemize but giving below this level, “bunching” (combining multiple years’ worth of charitable giving in a single year) may be strategy to consider.
NEW 35% Cap on Itemized Deduction Value
One of the biggest shifts is a new cap on the value of itemized deductions for high-income individuals. For those in the 37% tax bracket, the cap on the value of their giving will be reduced to 35%.
- For example, currently a $10,000 gift would generate tax savings of $3,700. However, beginning in 2026, the value of the deduction will be reduced to $3,500.
For those higher wealth donors, this 2% shift could be significant. Leveraging strategies that provide a tax benefit outside of charitable deductions, such as reduced capital gains or fulfilled IRA RMDs (Required Minimum Distributions) could be strategies that help offset that 2% drop.
EXTENDED 60% AGI Limit for Cash Gifts
Another key provision of this bill is the permanent extension of the 60% AGI limit on cash contributions to qualified charities.
Previously set to expire, this higher limit—originally increased from 50% to 60% in 2017—now allows itemizing donors to deduct more of their income through charitable giving, year after year. This is especially advantageous for those making large one-time gifts or planning multi-year philanthropic strategies. Even better, it can be used in combination with the 30% AGI limit for gifts of appreciated assets, offering a powerful way to maximize both impact and tax savings.
NEW 1% Floor for Corporate Partners
Starting in 2026, corporations will only be able to deduct charitable contributions that exceed 1% of their taxable income. The existing 10% AGI cap on corporate charitable deductions remains in place, but now there is a floor as well as a ceiling. Any disallowed deductions cannot be carried forward unless the total giving exceeds the 10% cap.
This could be especially impactful for smaller businesses whose giving often falls below the 1% threshold. For these companies, “bunching” donations may become a key strategy to qualify for a deduction.
The One Big Beautiful Bill brings both opportunities and new considerations for charitable giving. It also emphasizes that strategic planning is more important than ever. Now is the perfect time to evaluate which types of gifts could offer the greatest tax advantages, or to explore giving strategies that provide benefits beyond a tax deduction—like making a Qualified Charitable Distribution (QCD) from your IRA.
Whether making small gifts or major donations, aligning your giving with tax-smart strategies ensures your generosity goes further, for both your finances and your faith-driven impact.
If you have any questions or would like to explore strategic giving options, feel free to contact our Planned Giving team at (800) 782-8227 or FocusPlannedGiving@fotf.org.
