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Why Charitable Giving Conversations Matter More Under the OBBA

If you’re in an advisory role, you’re probably already familiar with the One Big Beautiful Bill Act and how it can impact clients. You’ve probably read the updates and summaries to start thinking through what it means for the people you work with.

Many of your clients, however, are not in that same place. They may have seen some headlines but not thought about how it impacts them, or not heard about them at all. Wherever your clients are, this could be a good time to bring them back up and remind them to act.

Charitable Planning Is Getting More Attention

Mainstream coverage of charitable planning is increasing, which means clients may be coming to you with more questions. Donor-advised funds, in particular, are receiving renewed attention as a tool for organizing charitable giving, supporting community needs, and creating potential tax advantages.

This is a great time to help clients go beyond their basic curiosity and start thinking about their giving strategy. Many clients may not realize that the Athens Area Community Foundation can help establish donor-advised funds and other charitable giving vehicles designed to support the causes and community issues they care about.

The New Floor May Change Timing Decisions

Starting in 2026, clients who itemize deductions will face a new floor for charitable deductions. In general, charitable contributions will be deductible only to the extent they exceed 0.5% of adjusted gross income. Some gifts that have historically gotten a tax benefit may not in the future.

For some clients, this may make “bunching” charitable contributions more appealing. Rather than giving the same amount every year, a client may contribute multiple years’ worth of charitable gifts into a donor-advised fund in a single tax year. This can help the client exceed the threshold in that year while still allowing grants to be recommended to nonprofits over time.

The strategy is not right for everyone, but it is worth discussing with clients who itemize and want to be intentional about the timing of their charitable gifts.

The New Cap Adds Another Layer

The new law also includes a cap that affects clients in the highest federal income tax bracket. For clients in the 37% bracket, the tax benefit of itemized charitable deductions is capped at 35%. So a $10,000 charitable deduction will create a $3,500 benefit instead of a $3,750 one, all else being equal.

That doesn’t change a client’s desire to give, but it means you need to plan accurately.

Non-Itemizers Have New Opportunities, Too

The new rules do not only affect clients who itemize. Beginning in 2026, non-itemizers may be eligible for a charitable deduction of up to $1,000 for single filers and $2,000 for joint filers.

There are important limits, though. This deduction does not apply to noncash gifts or gifts to donor-advised funds. That distinction matters because gifts of appreciated stock and contributions to donor-advised funds remain important tools for many clients, especially those with larger or more strategic charitable plans.

Appreciated Stock Still Deserves Attention

Even with these changes, one planning principle remains especially important: donating appreciated stock held for more than one year is often more tax-efficient than writing a check. A gift of appreciated stock can help a client avoid capital gains tax on the appreciation. Clients who itemize may also be eligible to claim a deduction for the fair market value of the asset, subject to applicable rules and limits.

This can be especially useful for clients with concentrated stock positions, business interests, or long-held investments that have grown significantly over time.

Keep the Conversation Going

You do not have to cover every technical detail in the first conversation. Sometimes, simply asking clients how they are thinking about charitable giving under the new law can open the door to better planning.

The Athens Area Community Foundation is here to help as you guide clients through these changes. Please reach out anytime you are working with a charitable client, whether they are setting up a donor-advised fund, considering a gift of appreciated assets, or simply beginning to think more strategically about their giving.