What if your charitable giving could go further, supporting the causes you care about while strengthening your financial strategy? With major tax changes taking effect in 2026 under the One Big Beautiful Bill Act (OBBBA), charitable giving will look a little different for individuals and families. For higher-income donors, understanding the new rules can help ensure your generosity remains both impactful and tax-efficient.

The New Giving Landscape

The Big Beautiful Bill reshapes how charitable contributions are treated under federal tax law. Here are the most relevant updates for 2026 and beyond:

1. New Deduction for Non-Itemizers

Starting in 2026, individuals who don’t itemize deductions can claim a charitable deduction (up to $1,000 for single filers or $2,000 for married couples filing jointly) for direct gifts to qualified 501(c)(3) public charities. This expands the incentive for everyday donors but excludes contributions to donor-advised funds (DAFs) and private foundations.

2. Reduced Benefit for Top Earners

Also starting in 2026, the maximum deduction benefit for high earners drops slightly: from 37% to 35%. That means a $10,000 charitable gift will now generate a $3,500 federal income tax benefit instead of $3,700.

3. A 0.5% AGI “Floor” for Deductions

Another update in 2026 is that itemizers can only deduct charitable contributions that exceed 0.5% of their adjusted gross income (AGI). For example, a donor earning $1 million must give more than $5,000 before seeing any deduction benefit.

4. Permanence of the 60% AGI Limit

Another change is that the 60% of AGI limit for cash gifts to public charities has been made permanent, offering donors long-term clarity and planning stability.

What This Means for High-Income Donors

• Adjust your strategy: The new 0.5% floor means smaller recurring donations may no longer produce tax benefits. Higher-income donors should consider “bunching” or consolidating gifts to clear the threshold and optimize deductions.
• Consider timing: If your income or charitable goals are flexible, accelerating donations into 2025 could allow you to capture a larger deduction before the new caps and floors take effect.
• Reevaluate gift vehicles: While DAFs and private foundations remain powerful tools, the new deduction for non-itemizers doesn’t apply to them. This makes it more important to diversify giving methods (e.g., direct cash gifts, appreciated securities, or charitable trusts) to balance mission and tax efficiency.
• Review your portfolio: Because charitable giving intersects with investment strategy, now is the time to revisit how you’re funding donations. Donating appreciated assets can help avoid capital gains tax while increasing the after-tax value of your gift.

By working with an advisor who understands both your financial goals and your philanthropic priorities, you can give confidently, knowing your strategy supports the causes you value and your family’s long-term plan.

Philanthropy is deeply personal, but it’s also strategic. The upcoming tax changes reward donors who look ahead, think holistically, and coordinate giving with a broader financial plan. At VestGen, we help clients align generosity with strategy—so every dollar you give does the most good for both your community and your legacy.

Connect with a VestGen advisor to learn how thoughtful philanthropic planning can keep your giving—and your tax strategy—on track in 2026 and beyond.

This material is for informational purposes only and should not be construed as tax or investment advice. Individual circumstances vary.