The U.S. remains a world leader in charitable giving, reinforced by a tax system that supports philanthropy at every level. Recent legislative changes, including the landmark One Big Beautiful Bill Act (OBBBA), have reshaped how deductions work for donors, making it more important than ever to plan your giving with intention.

Understanding the basics of charitable planning can initially seem complex. Here’s a simplified overview we came up with for clients (we would note this is not exhaustive advice; consultation should be made in conjunction with your financial advisor and tax professional regarding your specific situation):

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Key Updates Under the OBBBA

Bigger Standard Deduction:

For tax year 2025, the standard deduction is $15,750 (single), $31,500 (married filing jointly), and $23,625 (head of household).

New Above-the-Line Charitable Deduction:

Starting in 2026, even if you don’t itemize deductions, you can claim up to $1,000 (single) or $2,000 (married) for cash gifts to public charities—this doesn’t apply to donor-advised funds (DAFs) or private foundations.

Changes for Itemizers:

Beginning in 2026, only the amount of charitable giving above 0.5% of your AGI is deductible, and the value of deductions is capped at the 35% tax bracket, even if your tax bracket is higher.

Permanent 60% Rule:

Cash gifts to public charities can be deducted up to 60% of AGI, and you can carry forward unused deductions (over the caps) for up to five years.

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Charitable Giving Strategies: Maximize Your Giving Power

With new legislation, effective charitable planning has never been more critical.

Appreciated Securities and Property:

Donating appreciated assets like stocks can address two tax issues simultaneously. You can deduct the fair market value of the shares and avoid paying capital gains tax. These donations are limited to a 30% AGI deduction. Ensure you’ve held the stock for over a year to qualify for long-term capital gain status. When deciding which stocks to donate, you can either target those with the highest percentage gain or use the donation to reduce concentration risk in your portfolio.

The Power and Double Bonus of Donor-Advised Funds (DAFs):

Donor-advised funds remain one of the most flexible and powerful charitable tools, even under the new law. DAFs are charitable investment accounts that can streamline tax planning for charitable deductions. Contributions to a DAF are deductible in the year they are made, even if the funds are distributed to charities over several years. This allows for "bunching" donations into a high-income year to maximize deductions. DAFs are also convenient for donating appreciated stock, especially if the recipient charity cannot accept stock donations directly. In conclusion, they offer a “double bonus” for donors:

• You can avoid all capital gains tax by donating appreciated securities directly into the DAF.
• You receive a deduction for the full fair market value of those assets in the year you contribute.

Qualified Charitable Distributions (QCDs)

For those age 70½ and older, QCDs remain a top strategy. You can direct up to $105,000 (for 2025) from your IRA to a qualified charity—satisfying your required minimum distribution and keeping the withdrawal out of taxable income.

Roth Conversions and Charitable Giving

Combining charitable deductions with Roth IRA conversions can help offset taxable income, especially in lower income or transition years. This allows you to make impactful gifts while optimizing the tax consequences of conversions.

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Key Takeaways

Charitable giving isn’t just about tax savings—it's about legacy, impact, and aligning your wealth with your values. The new legislative landscape encourages donors to be both generous and strategic. In light of the One Big Beautiful Bill Act, now is an important time to revisit your charitable giving strategy. Below are key takeaways to consider:

1. Timing matters: Accelerate major gifts in a single calendar year —“bunching” several years' donations or using a donor-advised fund can maximize your tax benefit under current rules.
2. Give Beyond Cash: Combine cash and appreciated assets to make the most of new deduction rules and expand the impact of your giving.
3. Seek professional advice: Working with a trusted financial advisor or tax professional can help create a plan tailored to your goals and values while maximizing tax alpha.

Reach out to GatePass Capital to discuss your charitable planning needs or for guidance navigating the new rules. We're here to help you make the most of your charitable impact.

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