New Tax Law Gives and Takes From Charitable Giving in 2026
April 1, 2026 · 2 min read
Claire Cummings
The One Big Beautiful Bill Act, signed into law in July 2025, reshapes the charitable giving landscape starting in tax year 2026. A new deduction for non-itemizers promises to broaden the donor base, but new floors and caps on itemized deductions threaten to offset those gains — and then some.
Non-Itemizers Get a New Deduction
For the first time since the 2017 tax overhaul dramatically reduced the number of Americans who itemize, non-itemizers can now deduct charitable cash donations. Single filers can deduct up to $1,000 and married couples filing jointly up to $2,000, according to a Fidelity Charitable analysis.
The provision matters because roughly 90% of U.S. households currently take the standard deduction. Donations to donor-advised fund sponsors and certain private foundations are excluded, and the amounts are not indexed for inflation.
New Floors and Caps Hit Existing Donors
Itemizers now face a 0.5% AGI floor before claiming charitable deductions. A couple earning $300,000 can only deduct donations exceeding $1,500. For high earners in the 37% bracket, the Tax Foundation reports a new 35% cap on the tax benefit of charitable deductions, reducing the value of a $1,000 donation from $370 to $350.
The National Council of Nonprofits estimates the non-itemizer deduction will generate roughly $74 billion in new charitable giving over the next decade. But the floors and caps are projected to reduce giving by $81 billion over the same period — a net loss of approximately $7 billion.
What Grant-Funded Nonprofits Should Do Now
Organizations that depend on a mix of grant funding and individual donations should model the impact on their specific donor base. The Fisher Phillips analysis recommends that nonprofits review their fundraising strategies before year-end campaigns launch.
Grant seekers using grantedai.com can diversify their funding mix by identifying foundation and federal grant opportunities that may help offset potential declines in individual giving. For a full breakdown of the law's nonprofit implications, check the Granted blog.