A Message from Co-Founder Mike Scherer
In addition to my role as Co-founder of Worth the Wait, I’m also a financial planner. I spend my days helping people navigate the complex world of investing, charitable giving, tax planning, and retirement planning. Today, I’m writing to combine both of my professions into one message.
As many of you know, on July 4, 2025 the One Big Beautiful Bill Act, or OBBBA as it will be referred to here, was passed into law. Included in this bill are changes that will affect not only your charitable giving strategies, but also the nonprofits who rely on donations from the public. This short article will discuss some of the new rules in the OBBBA, but more importantly it will discuss some actionable strategies you can take to begin planning for how the bill might impact your giving.
Starting in 2026, taxpayers who itemize their deductions will have to exceed a 0.5% adjusted gross income floor to deduct their charitable contributions. An example is the easiest way to explain this: If your adjusted gross income is $200,000, your charitable giving will need to exceed a floor of $1,000 to be deductible. So, if you give $2,000 to charity – you only get credit for $1,000 of that gift as an itemized deduction.
While this doesn’t sound like a huge deal on its own, there are other provisions in the bill that could further impact charitable giving. An additional provision is that individuals in the highest income tax bracket (37%) will have their charitable deductions capped at 35% starting in 2026. Add that to the AGI floor of 0.5% for charitable giving, and it reduces the overall deduction someone in the highest income tax bracket receives for charitable giving.
Finally, there is a new deduction for charitable contributions starting in 2026. For taxpayers who do not itemize their deductions, you can now deduct $2,000 for a married couple, or $1,000 for an individual in charitable contributions, as an “above the line” deduction. This deduction is for cash gifts only.
Many of you reading this are probably saying “Stop being a nerd Mike, why should I care?” Good question. If you are planning a large charitable gift, or if philanthropic planning is an important aspect of your financial situation, the timing of a large charitable gift is important to consider. You should ask your tax and financial advisor if you should consider giving in 2025 before these tax provisions take effect. Depending on your overall tax and financial situation, the gift can potentially get you better tax benefits by accelerating it into 2025 compared with making it in 2026 or beyond. Additionally, if you’re age 70.5 or older and you have an IRA, you might consider making Qualified Charitable Distributions from your IRA directly to a charity in 2026 and beyond.
Consider asking your advisors how to plan your charitable giving before the end of the year. There are many tools available to charitably-minded individuals to help them capture the most tax benefits from their giving. Donor advised funds can be a great method to utilize timing of a deduction for a large charitable gift, while then being able to plan out distributions from the donor advised fund to individual charities over time. Additionally, gifting appreciated securities to a charity can be a great way to capture multiple tax benefits and still accomplish your philanthropic goals. Giving to charity is a wonderful endeavor on its own, but if you can maximize your tax benefits while doing it, it is undoubtedly a win-win scenario.
Best, Mike Scherer
Co-Founder Worth the Wait
