Here’s How New Tax Changes Could Impact Your Charitable Giving

We’ll try to demystify these changes and show you how they might apply to your situation, so that you can optimize your giving—whether it’s for farmed animals or for any cause close to your heart.

Note: The information provided on this site is for general informational purposes only and does not constitute financial, investment, or legal advice. Always consult with a qualified financial advisor or other professional for advice tailored to your specific circumstances.

Broadly speaking, the tax changes can be broken down into two categories: straightforward changes for donors who don’t itemize, and slightly more complex changes for donors who do itemize.

Changes for Non-itemizers

First of all, under the OBBBA, more people are expected to take the standard deduction. That’s because the Act permanently increases the standard deduction by $1,000, to $15,750 for single filers and $31,500 for joint filers in 2026—so an increasing number of people will see higher tax savings from the standard deduction than from itemizing.

Historically, people who take the standard deduction haven’t been allowed to deduct charitable gifts, except during a temporary COVID provision in 2021. But now, under the OBBBA, non-itemizers can deduct up to $1,000 in charitable gifts per person ($2,000 for married couples filing jointly).

Here’s the power of that new $1,000 charitable deduction. For the first time, even if you don’t itemize, you could join our Mended Heart Society, our most committed donor circle, and deduct your entire annual contribution. Or you could join The Heart Beat, our monthly giving community, and deduct a monthly gift of up to $83. With your charitable gifts effectively shielded from taxes (up to $1,000), you can direct more of your hard-earned dollars to ending the suffering of farmed animals.

It’s important to note that the deduction applies only to cash contributions to qualified charities. Gifts from donor-advised funds and private non-operating foundations don’t qualify.

Changes for Itemizers

If you itemize, charitable giving becomes a little more complicated.

OBBBA introduces a new floor for charitable deductions for donors who itemize. Starting in 2026, itemizers can only deduct charitable contributions above .5% of Adjusted Gross Income (AGI). If your AGI is $200,000, and you donate a total of $15,000 over the course of the year, this rule makes your first $1,000 non-deductible, while making the next $14,000 deductible. (If you’d taken the standard deduction in this scenario, only $1,000 would have been deductible—compared to $14,000 from itemizing.)

One smart strategy to work with the new floor is to “bunch” several years’ worth of gifts into one tax year. If your AGI is $200,000, and you give $1,000 per year, you’d see no tax deduction in any given year—because your annual charitable contribution wouldn’t exceed the new .5% AGI floor. If, however, you “bunched” three years’ worth of giving into one year, and donated $3,000, you’d clear the AGI floor and be able to deduct $2,000.

Alternatively, consider “bunching” your contributions into a donor-advised fund (DAF). With a DAF, you can contribute enough in one year to clear your AGI floor, without also having to distribute your full contribution to charity during that tax year. In fact, once you contribute, you can let your money grow in your DAF for as long as you like—and then recommend your grants to charity on whatever schedule works best for you. This means you could contribute three years’ worth of donations to your DAF in one tax year, take the deduction, and then slowly distribute gifts from your DAF over the course of three years—just as you would have otherwise. If you don’t already have a DAF, consider whether opening one would be advantageous for you.

A second change in the OBBBA is that tax deductions are capped at 35% of the gift amount. If you’re in the top tax bracket (currently 37%), you’ll only be able to deduct 35% of your charitable contributions—not the 37% that’s been standard in the past.

Third, the OBBBA permanently sets the deduction limit for cash charitable contributions at 60% of your AGI, while keeping the 50% limit for non-cash contributions (e.g., stock). This means that if your AGI is $200,000, you can deduct up to $120,000 in charitable contributions if you give only cash—and $100,000 if you give only stock (or another non-cash gift). If you make “combined” gifts of both cash and non-cash, the IRS’ ordering rules will determine which deductions are taken first. You may be able to carry any unused deductions forward for up to five years.

Appreciated assets

Donating long-term appreciated assets—such as stocks, cryptocurrency, or real estate—remains a tax-efficient strategy, as you can still avoid capital gains tax and deduct the fair market value of your donated assets. These donations, like cash gifts, are also subject to the 0.5% AGI floor and the 35% cap on itemized deductions.

Legacy giving

Importantly, the OBBBA increases the federal estate and gift tax exemption to $15 million per person ($30 million for couples), with annual inflation adjustments. This means fewer estates will be subject to federal taxes, so in many cases legacy gifts (gifts in wills or estate plans, or by beneficiary designation) will provide fewer tax benefits than in previous years. However, legacy gifts are still a meaningful way to contribute to the causes you care most about, and may offer a unique way to maximize your giving potential.

Estates valued above $15 million (or $30 million for couples) are still subject to federal estate taxes. If this applies to you, you may see significant tax benefits from leaving charitable bequests.

Corporate giving

Under the OBBBA, corporations can only deduct charitable contributions that exceed 1% of their taxable income. Corporate deductions are still capped at 10%, and unused deductions can be carried forward for five years. Contributions below the 1% floor can only be carried forward if total contributions exceed the 10% ceiling. If you’re determining charitable giving for a corporation, you might consider “bunching” several years’ of corporate gifts into one tax year.

Your impact, amplified

Every dollar you give helps build a world where animals are treated as living, feeling beings, free from human exploitation. We’re here to help you align your generosity with what matters most to you. Please contact [email protected] for more information.

See Tax Foundation, Fidelity Charitable, or your financial advisor for more information.