Charitable Giving Strategies for 2026: Understanding the New OBBBA Rules
Charitable giving can be a meaningful way to support the organizations and causes that matter to you. It can also play an important role in a coordinated financial and tax plan.
Beginning in 2026, provisions enacted under the One Big Beautiful Bill Act change how certain charitable contributions are treated. Understanding the new rules may help you make more informed decisions about when, how, and how much to give.
A New Floor for Taxpayers Who Itemize
Beginning with the 2026 tax year, taxpayers who itemize may generally deduct only the portion of eligible charitable contributions that exceeds 0.5% of adjusted gross income.
For example, if your adjusted gross income is $200,000, the first $1,000 of charitable contributions would fall below the new floor. Eligible contributions exceeding that amount may be deductible, subject to the usual contribution limits and other applicable restrictions.
Because amounts falling below the floor generally cannot be deducted for 2026, taxpayers who make consistent annual donations may want to reconsider the timing of their contributions.
A Deduction for Taxpayers Who Do Not Itemize
The new law also creates a charitable deduction for taxpayers who take the standard deduction. Beginning in 2026, non-itemizers may generally deduct up to $1,000—or up to $2,000 for married couples filing jointly—for eligible cash contributions made to certain qualified charitable organizations.
Not every donation qualifies. The provision applies to eligible cash contributions, and donations to donor-advised funds do not qualify for this particular non-itemizer deduction. Proper documentation should be retained for every contribution.
Using a Donor-Advised Fund
A donor-advised fund, or DAF, may remain useful for taxpayers who itemize and want to consolidate several years of charitable giving into one tax year. This approach, commonly called bunching, may help a taxpayer exceed the standard deduction and the new 0.5% charitable floor in a selected year.
The donor may receive a deduction in the year an eligible contribution is made to the fund, subject to applicable rules, while recommending grants to charities over time. Contributions to a DAF are generally irrevocable, so the strategy should be evaluated carefully before assets are transferred.
Annual Gifts to Individuals
Charitable giving should not be confused with making gifts to family members or other individuals. In 2026, the federal annual gift-tax exclusion is $19,000 per recipient. Married couples may potentially give a combined $38,000 per recipient when gift-splitting and reporting requirements are satisfied.
Giving more than the annual exclusion does not necessarily mean gift tax will be immediately due, but it may require a federal gift-tax return and may reduce the donor’s remaining lifetime gift and estate-tax exemption. Gifts to individuals are not deductible as charitable contributions.
Bringing the Strategies Together
The new rules make coordination especially important. Depending on your goals, you might consider bunching charitable contributions, using a donor-advised fund, donating appreciated assets, or coordinating charitable gifts with other year-end tax strategies.
Before completing a significant charitable or personal gift, speak with your financial, tax, and legal professionals. Thoughtful planning can help ensure that your generosity supports the people and organizations you care about while remaining aligned with your broader financial goals.