Charitable Giving Strategies Under the New Tax Law

What Should Philanthropic Families Know About the New Charity Tax Law

For most families, generosity doesn’t start with a tax return. It starts with a conversation about the causes that matter: the hospital that cared for a parent, the university that opened doors, the local food bank that never seems to have enough.

Still, the tax code shapes how that generosity plays out. And in July 2025, the rules changed.

The One Big Beautiful Bill Act (OBBBA) made permanent many provisions of the 2017 Tax Cuts and Jobs Act and introduced several new wrinkles for charitable giving, most of which took effect January 1, 2026. Some changes open doors. Others add friction. Here’s what changed and the planning ideas worth discussing with your tax and financial professionals.

What Changed

A new deduction for non-itemizers. Taxpayers who take the standard deduction can now deduct cash gifts to qualifying public charities, up to $1,000 for single filers and $2,000 for married couples filing jointly. Gifts to donor-advised funds and most private foundations don’t qualify.

A 0.5% floor for itemizers. Only charitable contributions exceeding 0.5% of your adjusted gross income are deductible. For a household with $500,000 of AGI, the first $2,500 of giving produces no deduction.

A cap for top earners. For taxpayers in the 37% bracket, the tax benefit of itemized deductions is now limited to 35 cents on the dollar.

A higher SALT cap. The state and local tax deduction cap rose to $40,000 for many filers, with phase-downs at higher incomes. That may push some families back into itemizing, which makes charitable deductions count again.

These changes don’t reduce the value of giving. But they do reward planning.

Strategy 1: Revisit Whether You Itemize

After 2017, many families stopped itemizing, and their charitable gifts essentially became invisible on their tax return. The expanded SALT cap may change that math, especially for families in high-tax states. The answer you got in 2019 may not be the answer for 2026, so it’s worth running the numbers fresh.

Strategy 2: Bunch Gifts Into Fewer Years

Instead of giving $20,000 every year, a family might give $60,000 in one year and nothing for the next two. In the “bunch” year, itemized deductions may clear the standard deduction by a wider margin. The new 0.5% floor adds another reason to consider this, since concentrating gifts means absorbing the floor once rather than every year.

A donor-advised fund (DAF) often makes bunching practical. You contribute a larger amount in one year, generally receive the deduction then, and recommend grants to charities over time. Your favorite organizations keep receiving steady support while your deductions are concentrated.

Strategy 3: Give Appreciated Assets Instead of Cash

When you donate long-term appreciated securities directly to a public charity or DAF, you may be able to deduct the full fair market value and avoid capital gains tax on the appreciation. For families holding concentrated, low-basis positions, this can be a meaningful way to rebalance while giving. Gifts of appreciated property are generally limited to 30% of AGI, with a five-year carryforward for excess amounts.

Strategy 4: Qualified Charitable Distributions for Retirees

If you’re 70½ or older with a traditional IRA, a qualified charitable distribution (QCD) lets you transfer money directly to a qualifying charity, up to an inflation-indexed annual limit. The distribution is excluded from taxable income and can count toward required minimum distributions.

QCDs may be especially useful now. Because the gift is excluded from income rather than deducted, it isn’t subject to the 0.5% floor or the 35% cap, and it works whether or not you itemize. Lower AGI may also affect Medicare premium surcharges and the taxation of Social Security benefits. Note that QCDs generally can’t go to donor-advised funds or private foundations.

Strategy 5: Charitable Trusts for Larger Goals

A charitable remainder trust can provide an income stream to you or your beneficiaries, with the remainder passing to charity. Contributing appreciated assets may allow the trust to sell them without immediate capital gains tax. A charitable lead trust works in reverse: charity receives payments first, and the remainder passes to family, which may support wealth-transfer goals.

These vehicles involve legal, tax, and administrative costs and require careful coordination among your attorney, CPA, and financial advisor. They aren’t right for everyone.

Make It a Family Conversation

Tax rules change. Values tend to last longer. Involving children and grandchildren in giving decisions, through a DAF, a family foundation, or simply an annual giving meeting, can teach the next generation about budgeting, research, and responsibility. The new law is a good excuse to start that conversation.

Questions to Bring to Your Advisors

• Will we itemize this year, given the new SALT cap and our expected deductions?
• Would bunching gifts through a donor-advised fund improve our overall tax picture?
• Do we hold appreciated assets that might be better donated than sold?
• If we’re 70½ or older, should QCDs replace some of our cash giving?

The Bottom Line

The new tax law doesn’t change why families give. It may change how they give most effectively. With thoughtful adjustments to timing and structure, philanthropic families may be able to support the causes they love while managing their tax exposure. The right strategy is the one built around your situation and coordinated with professionals who understand your goals.

Important Disclosures: This material is provided for general informational and educational purposes only and should not be construed as tax, legal, or investment advice or a recommendation of any specific strategy. Tax laws are complex and subject to change, and their application depends on individual circumstances. Information is based on our understanding of current law as of the date of publication and may not reflect subsequent legislative, regulatory, or IRS guidance. Charitable strategies involve risks, costs, and limitations, and may not be suitable for all investors. Please consult a qualified tax advisor, attorney, and financial professional before making any decisions. [Firm name] does not provide tax or legal advice. [Insert required broker-dealer/RIA disclosure and registration language.]