A New Era for Charitable Giving Under Trump’s Tax Overhaul

President Donald Trump’s newly enacted tax legislation—his self-described “big beautiful bill”—is reshaping how Americans will approach charitable giving. The sweeping tax reform, which adds trillions in tax breaks, introduces both new opportunities and challenges for donors. While a fresh charitable deduction for non-itemizers offers relief to millions, higher earners face new constraints that could alter their giving strategies in the coming years.

According to Giving USA, individual donations in the U.S. climbed to $392.45 billion in 2024, a 5% increase from the previous year. Yet, tax experts warn that the landscape of philanthropic incentives is shifting, particularly as Americans plan their year-end contributions for 2025. With many provisions taking effect in 2026, donors must now think strategically about when—and how—they give.

The Opportunity for Everyday Donors

For most taxpayers, the upcoming changes represent a rare chance to benefit from charitable giving even without itemizing deductions. Under current rules, about 90% of Americans take the standard deduction—$15,750 for individuals and $31,500 for married couples in 2025—leaving little incentive to donate for tax purposes.

That changes in 2026, when the law introduces a new charitable tax break worth up to $1,000 for single filers and $2,000 for married couples filing jointly. This expansion marks a significant policy shift, aimed at making philanthropy more accessible to middle-income households.

Financial planners suggest that smaller donors consider delaying certain contributions until early 2026 to capture this benefit. As certified financial planner Edward Jastrem explained, “It seems like a no-brainer to just do it in January and capture a little benefit that you wouldn’t otherwise achieve.”

This strategy aligns with a broader pattern among non-itemizers: timing charitable actions around tax efficiency rather than spontaneity, particularly when legislative transitions create short-term opportunities.

High Earners Face a Tougher Giving Environment

While non-itemizers gain, affluent donors may face new obstacles. Beginning in 2026, the law introduces a charitable deduction “floor,” allowing deductions only after contributions exceed 0.5% of adjusted gross income. Additionally, taxpayers in the top 37% bracket will see their maximum deduction rate reduced to 35%.

“It feels like a double hit,” said Dianne Mehany, head of EY’s private tax group, highlighting how these combined limits reduce the overall incentive for large-scale charitable gifts. The change could dampen donation flows from high-net-worth individuals—who historically contribute more than 70% of total charitable dollars—unless they adapt their strategies.

To mitigate these effects, experts recommend accelerating donations before the new rules take hold. Certified public accountant Sheneya Wilson suggests that top earners “frontload” charitable giving in 2025, possibly through donor-advised funds (DAFs). These vehicles allow donors to claim immediate tax deductions while distributing funds to charities over time—effectively locking in current benefits before the policy shift.

Strategic Timing in a Shifting Policy Landscape

The evolving tax code underscores the growing importance of financial planning in philanthropy. As the new deductions and limitations phase in, taxpayers—both modest givers and major donors—will need to balance generosity with fiscal prudence.

If implemented smoothly, Trump’s policy could broaden participation in charitable giving, particularly among non-itemizers who previously received no tax benefit. However, the pressure on high earners may prompt a temporary surge in donations ahead of 2026, followed by a potential slowdown once the new thresholds take effect.

For now, donors face a transitional window where timing, structure, and strategy can make a substantial difference. Those who plan ahead stand to maximize both their philanthropic impact and their tax efficiency—turning a political overhaul into a practical opportunity.