On July 4, 2025, the One Big Beautiful Bill Act (OBBB, H.R.1) was signed into law, which may impact the future of charitable giving for donors, advisors, and nonprofit organizations. At Tahoe Community Foundation, we are committed to helping donors, fundholders, professional advisors, and nonprofits navigate these changes and to uncover philanthropic opportunities that align with each donor's unique charitable goals and values. 

Below, we highlight three major changes under the new law that go into effect in 2026 that you should evaluate as you develop your charitable giving strategies, especially in the next few years: 

1. New deduction for non-itemizers: If you utilize the standard deduction and do not itemize your deductions, you will be able to receive a separate charitable deduction of $1,000 if you are a single filer and $2,000 when married filing jointly. This new deduction is limited to cash donations to qualifying 501(c)(3) organizations, excluding Donor Advised Funds and private non-operating foundations.
2. Itemized deduction limitation: The tax benefit of itemized deductions for those in the top bracket will be limited to 35%. To the extent your income is taxed in the 37% bracket, your itemized deductions will be reduced by 2/37ths (5.40541%). This effectively limits the benefit of your itemized deductions to 35% (37% * 5.40541% = 2%).
3. Haircut/deductibility hurdle: Charitable contributions will not be deductible until they exceed 0.5% of your Adjusted Gross Income. This “haircut” is determined before the above referenced itemized deduction limitation. The result is that if you are in the top tax bracket your charitable deductions get reduced twice, but this 0.5% hurdle applies to all who itemize and not just those in the top bracket. Please note that there is an even more severe limitation for Corporations.

What does this mean to you?

We encourage each individual and organization to consult with your professional advisors to determine how this new information may apply to your specific circumstances.  As your charitable partner, we recommend you carefully evaluate your planned giving for the next few years and evaluate possible opportunities to lock in the full benefits of your charitable donations before these changes take effect in 2026.  Specifically, we recommend you discuss the possibility of opening a donor advised fund (DAF), or funding an existing DAF.  Doing this could lock in additional deductions that may be severely limited in future years.  By funding a DAF you can lock in the tax benefits in 2025 and then give the funds to charity as you deem appropriate over the next many years.     

In times of change, giving remains essential. Tahoe has an incredibly generous community, and we believe that spirit of generosity is more important than ever and that your philanthropy remains vital to supporting the people and places of the Tahoe region. As we continue to navigate the changes taking place that may influence planned giving, please know that the Community Foundation is committed to working alongside our donors, professional advisors and the nonprofit sector to navigate these changes together.