New Tax Law Reshapes Charitable Giving Landscape
One Big Beautiful Bill Act introduces deduction for non-itemizers while making estate tax exemption permanent
MCPHERSON, Kan. —President Trump signed the One Big Beautiful Bill Act (OBBBA) into law on July 4, 2025, bringing significant changes to charitable giving and tax policy. The sweeping 900-page legislation makes permanent the increased standard deduction from the 2017 Tax Cuts and Jobs Act—now $15,750 for single filers and $31,500 for married couples—while introducing new restrictions that allow itemizers to claim charitable deductions only on amounts exceeding 0.5% of adjusted gross income. Most notably, starting after 2025, the law creates a new charitable deduction for non-itemizers of $1,000 for single filers and $2,000 for married couples, potentially reviving charitable giving among the 90% of households that don't itemize.
The OBBBA also provides clarity for estate planning by making permanent the increased estate tax exemption, which rises to $15 million for individuals and $30 million for married couples in 2026. According to the McPherson County Community Foundation, these changes present both challenges and opportunities for philanthropy. While fewer taxpayers will benefit from itemizing charitable deductions, the new non-itemizer deduction could re-engage millions of Americans in charitable giving who have been sidelined since 2017. Nonprofit organizations and financial advisors are encouraged to adapt their strategies to this new landscape, emphasizing that charitable motivations extend beyond tax benefits.
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