Charitable Giving Under the 2025 OBBBA: What Individual Taxpayers Need to Know

The 2025 One Big Beautiful Bill Act (OBBBA) reshapes the tax landscape for charitable giving. While it introduces new incentives for everyday donors, it also imposes fresh limitations on high-income philanthropists. Here’s a detailed breakdown of what’s changed and what it means for you.

Key Takeaways at a Glance

For Non-Itemizers: A New Reason to Give

Starting in 2026, taxpayers who do not itemize can deduct up to $1,000 ($2,000 for joint filers) in charitable contributions “above the line.” This universal deduction is a permanent provision and excludes gifts to donor-advised funds (DAFs) and supporting organizations.

This change democratizes the tax incentive for giving, offering a tangible benefit to the majority of taxpayers who take the standard deduction. For example, a single filer in the 22% bracket giving $1,000 saves ~$220 in taxes. Charities are already preparing to tailor messaging around this new incentive, encouraging campaigns like “Give $20 a week and save on your taxes.”

For Itemizers: New Limits to Navigate

OBBBA introduces a 0.5% AGI floor, meaning only the portion of charitable contributions exceeding 0.5% of adjusted gross income is deductible. For a taxpayer with $200,000 in AGI, the first $1,000 of charitable giving yields no deduction.

Additionally, the deduction benefit is capped at 35% for high-income earners, even if their marginal tax rate is higher. This effectively reduces the tax savings on large gifts. For instance, a $100,000 donation (above the new 0.5% AGI floor) from someone in the 37% bracket now saves $35,000 in taxes instead of $37,000.

These changes may encourage strategic behaviors such as bunching donations into high-income years or using Donor Advised Funds (DAFs) to consolidate giving.

Appreciated Securities: A Smart Giving Strategy

While not new under OBBBA, donating appreciated securities (like stocks or mutual funds) remains a powerful strategy:

Benefit	Description
Avoid Capital Gains Tax	Donating appreciated assets held >1 year lets you avoid paying capital gains tax on the appreciation.
Full Fair Market Value Deduction	You can deduct the full market value of the asset (subject to AGI limits), not just your cost basis.
Preserve Cash	You retain liquidity by donating assets instead of cash.
Ideal for High-Income Years	Helps offset income in years with large capital gains or bonuses.

The Value of Donor-Advised Funds (DAFs)

DAFs remain a strategic tool, especially under the new rules:

Advantage	Explanation
One-Time Transfer	Contribute appreciated securities once, then distribute to multiple charities over time.
Simplified Administration	Avoid the hassle of arranging seperate transfers to each charity.
Strategic Bunching	Make a large gift in one year to exceed the 0.5% AGI floor, then grant out several years.
Tax Timing Flexibility	Deduct now, give later – ideal for managing income spikes or estate planning.

AGI Limits to Know

Final Thoughts

• Middle-income donors now have a tax reason to give – even small amounts.
• High-income donors should plan carefully to preserve tax efficiency.
• Appreciated securities + DAFs offer unmatched flexibility and tax leverage.
• Nonprofits will likely shift messaging to highlight the new universal deduction and encourage strategic giving.

Navigating the charitable giving landscape under the 2025 OBBBA requires thoughtful planning – especially when considering strategies like bunching, donor-advised funds, or donating appreciated securities. If you’d like help thinking through these issues or coordinating with your tax advisor to structure your giving in the most effective way, feel free to reach out to us at Integris Wealth. We’re here to support your philanthropic goals with clarity and care.

The information provided herein is for educational purposes only, and should not be construed as advice, including, but not limited to tax, legal, insurance, investment, or retirement advice. For your specific planning needs, please seek the advice of Integris Wealth Management, your tax accountant, attorney, insurance agent, or other professional as appropriate. Investing involves the risk of loss.