The One Big Beautiful Bill, signed into law in July, included several provisions impacting charitable giving. Some donors may find it more advantageous to make larger contributions in 2025. CFNLA recommends you meet with your tax advisor now to ascertain how best to take advantage of the tax law changes before year-end.
Tax Law Changes in Effect in 2025
- In 2025 the standard deduction for individuals increases to $15,750 (or $31,500 for married couples filing jointly). Given the increase we recommend you closely evaluate whether your charitable giving plus other itemized deductions exceed the standard deduction amount. You may find bunching donations within a single year to be an effective strategy.
- Adjusted Gross Income (AGI) limits: The new law extends the existing ability to deduct up to 60% of AGI for cash contributions to 501 (c)(3) public charities.
Tax Law Changes Beginning in 2026
- New Above the Line Deduction for Non-Itemizers:
- Previously only taxpayers who itemize could deduct charitable contributions. Beginning in 2026, individuals who do not itemize (e.g. those taking the standard deduction) may deduct up to of $1,000, or $2,000 for married couples filing jointly.
- New Rules for Itemizers:
- New Limit to Deductions for Itemizers in Top Bracket. Tax benefits of itemized charitable deductions are capped at 35% (even for those in the 37% tax bracket). Thus, a high-income filer donating $1,000 will receive a $350 deduction instead of the current $370.
- New Floor on Deductions for Itemizers. Effective in 2026, itemizers who make charitable contributions may only claim a deduction to the extent qualified contributions exceed 0.5% of their adjusted gross income (AGI). For example, a couple with an AGI of $300,000 could only deduct charitable donations in excess of $1,500.
How Can You Respond?
For some donors, accelerating donations in 2025 may result in greater tax benefits. CFNLA will work with you and your tax advisor to ensure you maximize your tax benefits while achieving your philanthropic goals.
We encourage you to consider giving more in 2025 because:
- No AGI Floor in 2025: There is no adjusted gross income (AGI) floor for itemized charitable deductions, meaning every dollar donated up to normal IRS limits is deductible.
- No Limit to Deductions for Itemizers in 2025: Donors in the top 37% tax bracket can claim the full 37% benefit for charitable contributions.
- Itemizing Easier in 2025: The increased cap on state and local taxes (SALT) (up to $40,000 in 2025 from $10,000 in 2024) makes it easier for more taxpayers to itemize. (This increased deduction phases out for taxpayers with incomes over $500,000.)
“Bunching” is an effective strategy to achieve greater deductions. Simply accelerate your giving in 2025 to include donations for future years resulting in a greater tax benefit for 2025. For example, if you plan to give $10,000 to a nonprofit annually you can bunch three years of donations in a CFNLA Donor Advised Fund (DAF) to receive the benefit of a $30,000 donation in one tax year. Then, as a DAF fundholder you may recommend grants from a DAF per your desired timeframe, in this case three years.
Remember the Power of Noncash and Illiquid Assets: You can still avoid capital gains tax by giving long-term appreciated assets.
Ways to Give with CFNLA
Prior to year-end we can help you establish a Donor Advised Fund (DAF) with a minimum donation of $5,000, select charities or charitable funds (notably DAFs are excluded) to receive Qualified Charitable Distributions (QCDs) from an IRA, or donate appreciated non-cash assets to charity.
- Establish a Charitable Fund
- Donor Advised Funds (DAFs) allow donors to consolidate all annual charitable giving and receive only one tax receipt while supporting multiple charitable organizations.
- Designated Funds and Field of Interest Funds can receive Qualified Charitable Distributions (QCDs) from your IRA. Not sure how to designate your QCDs? Partner with CFNLA and support the Early Childhood Education Initiative which provides scholarships for children from birth to 3 to attend early learning centers.
- Become a Sustaining Member
- Support CFNLA’s mission by becoming a member. Membership contributions directly support our work to gather data, cultivate and drive valuable community partnerships, address challenges the data reveals, and fund responsive programs through grantmaking. To become a member, mail your tax-deductible contribution to our office (401 Edwards Street, Suite 105, Shreveport, LA 71101) or donate online at cfnla.org/give. You may also donate via a Donor Advised Fund or with securities.
Explore all ways to give at cfnla.org/give. To learn more about how CFNLA can help you achieve your philanthropic goals, contact Kristi Gustavson, CEO, at [email protected].