Big Changes for Charitable Giving in 2026

If you’re like me, you’ve perhaps just figured out how the 2018 tax code changes affect you, right on time for the next big change coming in 2026. The 2018 increase in the standard deduction alone resulted in millions upon millions of households deciding to stop itemizing their returns, and more shifts are coming.

One of the side effects of fewer people itemizing is that charitable giving – one of people’s best ways to help their community while also saving on taxes – took a huge hit following the 2018 tax updates. The One Big Beautiful Bill Act (“OBBB”, which also has other names around here) will once again have serious repercussions – some favorable, others not – on how you file your taxes. These changes will once again affect how people support the causes they care about, including ours. An important note: I am not a financial advisor, nor is this financial advice.

What’s changing for non-itemizers:

People who take the standard deduction will have a new charitable giving option starting next year. Individuals can deduct up to $1,000 over the standard deduction as charitable contributions (for those married filing jointly, up to $2,000). 

The Good: Hopes are high this additional incentive will encourage people who stopped making charitable donations after the standard deduction increase of 2018 to begin doing so again. Monthly donations, car donations, and any one-time cash donations you’re used to deducting on your state income tax return can be counted toward your federal return as well — yes, even if you don’t itemize!

The Bad: This change puts a limit on how much you can claim as a federal deduction if you don’t itemize. While any gifts you make over the $1,000 ($2,000 jointly) threshold can count toward your state return, any gifts over that threshold will not count as a tax-deductible gift federally. 

What this means: If you don’t itemize, you may receive an additional tax break over the standard deduction by making charitable contributions up to $1,000 ($2,000 jointly). Additionally, if your charitable giving exceeds this threshold, it might be time to speak to a financial advisor about whether you may want to begin itemizing, open a donor-advised fund, or talk about “Smart Giving” (more on Smart Giving below).

What’s changing for itemizers:

The OBBB sets a new “floor” for charitable deductions, 0.5% of your Adjusted Gross Income (AGI). If your total giving for the year is below the “floor”, your gift may not be federally tax-deductible. There is also a new “ceiling” based on your AGI (it’s way up there at 35%, so doesn’t affect many people, but it’s there). Give more than the “ceiling”, and anything over that isn’t deductible either.

The Good: Again, not a financial planner but I don’t really see what the good is with this one. This effectively allows the federal government to tax income which you’ve donated up to a certain amount. Talk to your advisor if you feel these rules may change your giving strategy.

The Bad: People are disincentivized to make donations below a certain threshold, as well as above a certain threshold. 

What this means: If you itemize, you may want to take a close look at how much you give to charity annually. You might want to consider increasing your giving or strategizing ways to maximize your impact. By giving from a retirement plan, opening a donor-advised fund, or planning gifts of stock or securities, you can take advantage of tax benefits and support the charities you care about. 

Smart giving is now even smarter:

Did I mention I’m not a financial advisor? Just in case you missed it, I’m not. That said, I’ve been doing my homework and want to share some of what I’ve learned with you. 

For itemizers and non-itemizers alike, “Smart Giving” is likely to become more beneficial to the taxpayer and to nonprofits than making gifts of cash, card, or check starting in 2026. Smart Giving is a broad term for making tax-advantaged charitable contributions which may include, but is not limited to:

1. Donate appreciated stocks or securities. Donating securities that you’ve held for more than a year directly to RMEQ can offset capital gains taxes and potentially reduce your adjusted gross income, making that “floor” for giving cash lower, too.

Example: Let’s say you planned to make an incredibly generous donation of $2,500 from your checking account to RMEQ this year. Under the new tax law, as a non-itemizer, only $2,000 of that would be tax-deductible (boo!). If you do itemize, this may or may not be enough to clear the “floor” of your AGI (and even if it does clear it, there’s a portion which won’t count as deductible – double boo!).

In this scenario, if you were to direct your stock broker to send $2,500 worth of appreciated stock to RMEQ, you’d get to deduct the donation from capital gains on those shares. Then, you could use the cash which you’d intended to donate to repurchase the same exact stock. Win-win!

Not a financial advisor. Just the facts.

2. Consider a Donor-Advised Fund (DAF). This is one you’ll definitely want to talk to a financial advisor about, or just call up one of your friendly community foundations to learn more. 

Donor-Advised Funds work like a charitable giving piggy bank. You can set funds aside to meet your giving goals (and keep an eye on that AGI “floor”). The funds are invested and can grow so you can give even more if the markets are doing well. DAFs are especially helpful for donors who like to “set it and forget it” or fund urgent, time-sensitive needs as they arise for causes they care about.

3. Give from a retirement fund. Making a gift from your Required Minimum Distribution (RMD) or making a Qualified Charitable Distribution (QCD) can reduce your taxable income and make a difference for LGBTQ+ people. Age restrictions can come into play, so be sure to check with your retirement plan manager or financial advisor about when it’s a good idea to consider this option.

Personally, this may be my favorite way for people to give. Since you likely didn’t pay taxes on the money going into your retirement account, and you’re donating it directly to a charity upon disbursement, the government doesn’t get to tax this money at any point when you give a gift this way!

4. Plan your gifts. While it may not impact your year-end tax preparation this year, by planning gifts in your will or estate, you’re setting up the LGBTQ+ community for a brighter future. You’ll also save your loved ones from complicated and burdensome paperwork and legal and tax implications by thinking ahead.

Naming RMEQ in your will, making us the beneficiary of your life insurance policy, or directing a gift from your estate can have a powerful impact for our community while also simplifying tax repercussions for your loved ones.

There’s much more in the OBBB. There are corporate charitable tax changes as well, not to mention some questionable add-ons which came in just before the vote.

It’s important to stay informed and stay ahead of these changes so you can make the most impact with your donations because your support makes all the difference.