Maximizing Your Charitable Giving This Holiday Season
Are you planning to donate to charity this holiday season? Understanding recent changes in funding and tax legislation can help you support your favorite non-profits more effectively and get the most from your donations.
Since the beginning of this year, approximately one-third of all nonprofits have experienced funding losses due to federal funding freezes, canceled grants and contracts, or stop-work orders. The recent government shutdown has further exacerbated these challenges, making it increasingly tough for organizations like food banks and homeless shelters to continue their essential work in our communities. As a result, individual donations are more critical and impactful than ever before.[1]
In July, Congress enacted the One Big Beautiful Bill Act, which introduced significant changes to the way Americans can deduct charitable donations from their taxes, depending on their tax bracket. While the bill increases potential refunds for donors in lower tax brackets, it decreases them for those in higher brackets. Ultimately, the National Council of Nonprofits has raised concerns that while it will lead to some positive outcomes, the bill will likely lead to less funding for nonprofits in the long-run. It’s important to understand how these changes might affect both you and the nonprofits you support.[2]
1. If You Take the Standard Deduction
For the 90% of taxpayers who take the standard deduction, the new legislation will permit an additional $1,000 deduction for cash donations to charitable organizations beginning in 2026. These changes could enable many in lower tax brackets to give more, potentially adding $74 billion in donations to nonprofits over the next decade.[3] This new deduction will not apply to your 2025 taxes, so if you wish to support local charities facing funding shortfalls now, donating as usual will help them address immediate needs. However, if you want to maximize your tax benefits you could choose to wait until January to make your donation. This way, you can claim the 2026 deduction on your 2027 tax filing while still helping organizations this winter.
2. If you Itemize Your Deduction
For those who itemize their deductions, starting in 2026 charitable donations can only be deducted if they exceed 0.5% of your adjusted gross income. For example, if your income is $80,000, only donations in excess of $400 can be deducted. To maximize your tax benefit in 2025 and help address current funding shortfalls, consider consolidating your planned giving for several years into a single donation before the end of this year. This strategy allows you to deduct the full amount from your 2025 taxable income.[4]
3. If you Itemize and are in the 37% Tax Bracket
Starting in 2026, high-income earners in the 37% tax bracket will see their charitable deduction capped at 35%, down from 37%. This change may discourage major donors, potentially reducing nonprofit donations by an estimated $81 billion over the next ten years.[5] If you fall into this group, you could consider bunching your donations for the next few years into a single contribution this year to take advantage of the higher deduction before the changes take effect. If you use this approach, be sure to inform the nonprofits you donate to about your giving plan so they can budget accordingly.
No matter which giving strategy you choose, there has never been a more crucial time to support local nonprofits. Your generosity enables these organizations to continue their vital work and address the growing needs within our communities.
This material is intended for educational purposes only. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. LongView Asset Management, LLC is a registered investment adviser with the SEC. Registration of an investment adviser does not imply a certain level of skill or training.
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[1] https://www.forbes.com/sites/alexanderpuutio/2025/10/30/nonprofits-face-double-crunch-as-shutdown-follows-severe-funding-cuts/
[2] https://www.councilofnonprofits.org/federal-tax-law-one-big-beautiful-bill-act
[3] https://www.councilofnonprofits.org/federal-tax-law-one-big-beautiful-bill-act
[4] https://philanthropyfocus.org/how-does-the-one-big-beautiful-bill-affect-charitable-giving/
[5] https://landtrustalliance.org/resources/learn/explore/what-the-one-big-beautiful-bill-means-for-charitable-giving
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