What the One Big Beautiful Bill Act Means for Charitable Giving

Signed into law on July 4, 2025, the One Big Beautiful Bill Act (OBBBA) introduces significant tax changes. Below are three highlights and how they may inform your charitable planning.

1. Standard Deduction Increases and New Limits on Itemized Deductions

The standard deduction is now permanently set at $15,750 (single) and $31,500 (joint). While the 60% AGI limit for cash contributions remains, new restrictions reduce the deductibility of charitable gifts for some taxpayers. Charitable deductions must exceed 0.5% of AGI, and high-income earners will see a reduced deduction rate of 35% rather than 37%.

Planning tip: These changes make tax benefits less predictable, but your charitable impact remains powerful. If you hold a Donor Advised Fund, now is the time to prioritize mission-aligned giving. Consider multi-year grant strategies, unrestricted gifts, or increasing support to core nonprofit partners who may be facing greater uncertainty.

2. Charitable Deduction for Non-Itemizers

Beginning in 2026, taxpayers who do not itemize can claim a deduction of up to $1,000 ($2,000 joint) for charitable contributions—though Donor Advised Fund contributions remain excluded.

Planning tip: If you already give through your DAF, you’re ahead of the curve. This provision aims to engage newer donors, but experienced philanthropists can continue to lead by example. Use your fund to deepen family engagement or involve next-generation donors in sustained, values-driven giving.

3. Estate Tax Exemption Made Permanent

The OBBBA locks in the higher estate tax exemption levels: $13.99 million (individual) and $27.98 million (joint) in 2025, increasing to $15 million and $30 million in 2026.

Planning tip: While estate tax pressure is reduced, many donors are using this stable window to refine their long-term philanthropic plans. Consider naming your DAF as a beneficiary of your estate or establishing legacy grants that reflect your deepest commitments. A thoughtful estate plan can ensure that your generosity continues well beyond your lifetime.

Brooklyn Org’s Donor Services team is here to help you adapt your giving strategy to align with your values, goals, and the new tax landscape.