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The One Big Beautiful Bill Act: What It Means for Charitable Giving

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law following a narrow House vote on the Senate’s amended version of H.R. 1. Spanning nearly 900 pages, this sweeping legislation reshapes multiple sectors of the U.S. economy—from taxation to healthcare to education.

For those of us in the philanthropic sector, the OBBBA brings several key developments that impact charitable giving, donor behavior, and nonprofit fundraising strategies. While the law ultimately excluded some of the more controversial proposals (such as increasing the net investment income tax on private foundations), it still carries major implications for advisors, donors, and fundholders alike.

Below are three major insights into how the OBBBA affects charitable planning, along with actionable steps you can take, whether you’re an individual donor, nonprofit leader, or professional advisor.

Insight #1: Standard Deduction Increases, and Itemizing Gets Harder

What changed:

The OBBBA makes permanent the increased standard deduction introduced by the 2017 Tax Cuts and Jobs Act (TCJA), setting the 2025 deduction at $15,750 for single filers and $31,500 for married couples filing jointly. In addition, a “bonus” standard deduction for taxpayers age 65+ is extended through 2028.

At the same time, the law tightens the rules for itemizing charitable deductions:

• Only the portion of charitable contributions that exceeds 0.5% of AGI is deductible.
• High-income taxpayers in the top income bracket may only claim a 35% deduction on charitable gifts, down from the full 37% rate.
• However, the 60% AGI limit for cash gifts to public charities is now permanent.

What it means for giving:

While these provisions simplify filing for many Americans, they may reduce the number of households that benefit from itemizing charitable deductions. This could further discourage giving among donors who were already unsure whether their contributions provided any tax benefit. It’s a continuation of the trend we saw after the TCJA, when itemizing dropped to under 10% of taxpayers and charitable giving stagnated among middle-income donors.

What to do next:

For donors: Remember that the impact of your gift goes far beyond tax benefits. Community needs remain high, and your generosity makes a real difference.

For advisors: Continue to incorporate charitable planning in discussions with clients—even those who no longer itemize. Philanthropy remains a powerful tool for legacy-building and community impact.

For nonprofits: Now is the time to double down on donor engagement. Highlight mission, impact, and emotional return—not just tax advantages.

Insight #2: A New Deduction for Non-Itemizers

What changed:

In a win for broad-based philanthropy, the OBBBA includes a new permanent charitable deduction for non-itemizers, effective in 2026:

• $1,000 deduction for single filers
• $2,000 deduction for married couples filing jointly

Gifts to donor-advised funds (DAFs) are not eligible, but gifts to operating charities, field-of-interest funds, and similar vehicles qualify.

What it means for giving:

This provision could be a game-changer for many American households. Over the last two decades, the share of adults who give to charity annually has dropped from nearly two-thirds to under 50%. With so few taxpayers itemizing, many middle-income households may have felt their giving didn’t “count” in the eyes of the tax code.

This modest deduction won’t rival the incentives available to ultra-high-net-worth donors, but it signals federal recognition of the value of everyday giving. And it could re-inspire generosity across a wide range of demographics.

What to do next:

For donors: If you don’t typically itemize, this new deduction gives you an additional reason to give regularly—and perhaps give a little more.

For advisors: Make sure your clients are aware of this change. A $1,000 or $2,000 deduction might not sound like much, but for many households, it’s a meaningful incentive to begin their philanthropic journey.

For nonprofits: Use this as an opportunity to re-engage lapsed donors and recruit new ones. Educational campaigns, end-of-year appeals, and Giving Tuesday drives can all highlight this new benefit.

Insight #3: Estate Tax Exemption Levels Made Permanent

What changed:

Perhaps the most anticipated provision in the philanthropic and estate planning communities: the OBBBA makes the current estate tax exemption permanent, removing the “sunset” provision that would have reverted thresholds back to 2010-era levels in 2026.

For 2025, the exemption remains at $13.99 million per individual (or $27.98 million per married couple). In 2026, these amounts will rise slightly due to inflation adjustments.

What it means for giving:

By locking in a high estate tax exemption, the new law reduces the number of estates that will face federal estate tax liability. This means fewer families will be motivated to make large charitable bequests purely for tax mitigation.

However, this doesn’t diminish the value or importance of planned giving. Many donors continue to support causes they care about through legacy gifts, not because of tax policy, but because they want to create a lasting impact.

What to do next:

For donors: Consider whether this new clarity changes your long-term plans. A legacy gift to your favorite cause can be a powerful statement of your value regardless of estate tax implications.

For advisors: You now have a longer planning window for high-net-worth clients. Use this opportunity to have thoughtful conversations about charitable bequests, donor-advised fund succession, and family philanthropy.

For nonprofits: Don’t ease up on planned giving efforts. The exemption may remain high, but the need for long-term sustainability through bequests and endowments is stronger than ever.

Clarity, Opportunity, and Community Impact

The One Big Beautiful Bill Act represents a huge shift in the charitable giving landscape. While some provisions may dampen tax incentives, others open new doors for everyday donors and provide clarity for long-term planning.

The community foundation is here to help you and your clients make the most of these changes. Whether you’re a donor thinking through your next gift, an advisor guiding philanthropic strategies, or a nonprofit leader trying to engage your community, we are your partner in navigating what’s next.

Let’s turn this moment of change into a moment of opportunity for your giving, for your clients, and for our shared future.