You're well aware of several key tax law changes that took effect on January 1, 2026. While philanthropy is never driven solely by tax rules, these changes will shape donor conversations over the coming months. At the same time, certain tax tools and principles did not change under the new laws and remain crucial to proper planning
Below are a handful of charitable giving tax principles that every nonprofit professional should understand at a high level—along with practical ways you can address each concept in your fundraising strategies.
New limits on itemized deductions
What's happening?
Beginning in 2026, charitable deductions for taxpayers who itemize income tax deductions are allowed only to the extent they exceed 0.5% of adjusted gross income (AGI). In addition, the tax value of itemized charitable deductions is capped at a 35% rate, even for donors in the 37% bracket. The 60% of AGI deduction limit for cash gifts to public nonprofits remains in place (after clearing the 0.5% floor), and gifts of appreciated assets generally remain deductible up to 30% of AGI.
What can you do?
The new limitations on charitable deductions will likely impact only a small but very important subset of your donors—those with very high incomes. Encourage those donors to talk with their tax advisors about “bunching” multi-year commitments into a single tax year. You can also emphasize gifts of appreciated assets, which typically offer greater overall tax efficiency than cash. Most importantly, remind donors that early coordination with their tax advisors matters more than ever. Tax season is the perfect time to start preparing for year-end giving.
New above-the-line deduction for non-itemizers
What's happening?
Starting in 2026, taxpayers who do not itemize income tax deductions may claim an above-the-line charitable deduction of up to $1,000 for single filers and $2,000 for married couples filing jointly for cash gifts to qualifying nonprofits. This deduction reduces income before AGI is calculated, but it does not apply to non-cash gifts and does not apply to gifts to donor advised funds.
What can you do?
This is an opportunity to re-engage small and mid-level donors who previously received no tax benefit from annual giving. It's also an opportunity to recruit new donors, who typically start with modest levels of support. Consider messaging that highlights the new deduction in simple terms and encourages recurring cash gifts—particularly among younger households and donors early in their philanthropic journey. As always, remind donors and prospective donors to consult their tax advisors to determine how this new deduction might apply to them.
Documentation rules remain strict
What's happening?
Gifts over $250 require written acknowledgment from your nonprofit. Non-cash gifts valued at $500 or more require IRS Form 8283, and gifts over $5,000 generally require a qualified appraisal. While these rules are not new, heightened IRS scrutiny makes compliance especially important.
What can you do?
Review your acknowledgment processes now to ensure receipts are timely, complete and compliant. You may also want to proactively educate donors about appraisal requirements for real estate or closely held business interests so that complex gifts do not stall late in the year due to missing documentation. Be sure you leave the legal and tax advice to donors’ advisors. Include language in every communication to the effect that donors should consult with a tax professional about how the rules apply in their unique circumstances.
QCDs are still amazing
What's happening?
For donors age 70 ½ or older, Qualified Charitable Distributions (QCDs) from Individual Retirement Accounts (IRAs) remain an especially efficient strategy. In 2026, the annual limit is $111,000 per taxpayer, and, if applicable, QCDs can satisfy required minimum distributions without increasing taxable income. Importantly, QCDs are not affected by the new itemized deduction floor or deduction caps, though they cannot be directed to donor advised funds.
What can you do?
Make sure your communications with older donors clearly reference QCDs as a tax-efficient giving option. A simple reminder in newsletters throughout the year, paired with instructions to contact their tax advisor and IRA administrator early, can significantly increase these IRA gifts and help ensure that donors start the process early enough to make it happen.
The charitable tax landscape in 2026 is more nuanced than in prior years. Donors are hearing new terminology from their CPAs and financial advisors, and your fundraising strategy should reflect that reality. The team at the Community Foundation will continue to keep you informed as we watch the trends. We are honored to work with you to strengthen charitable giving across our entire community.