Giving with Purpose in a Changing Tax Landscape

As a new year unfolds, many people take time to reflect on their values and the desire to make a positive difference. Charitable giving remains one of the most meaningful ways to express those values, even as tax laws evolve.

Beginning in 2026, changes to federal tax rules will affect how charitable gifts are treated for some donors. For those who itemize deductions, new limits may reduce the tax benefit of some charitable gifts. At the same time, a modest new deduction will become available for taxpayers who take the standard deduction. These developments do not diminish the importance of generosity in strengthening communities and supporting causes donors care about.

As giving patterns evolve, many people find it helpful to focus less on maximizing deductions and more on building thoughtful, intentional giving plans that reflect what matters most to them. Some choose to spread their support over time or include multiple generations in their philanthropic conversations. Others look for ways to align giving with long-term financial and personal goals. Regardless of the approach, clarity and intention help ensure that generosity remains meaningful and sustainable.

• One giving strategy that remains unchanged under the new rules is the IRA Qualified Charitable Distribution (QCD). For individuals age 70½ and older, this option allows gifts to be made directly from an IRA to eligible charities without increasing taxable income.
• Donor Advised Funds let you make a charitable gift, receive an immediate tax benefit, and recommend grants to the causes you care about. Many donors “bunch” several years of giving into one contribution for greater tax efficiency, then support nonprofits of their choosing at their own pace.
• Documenting charitable intentions — whether for current giving or future plans — provides peace of mind and helps avoid uncertainty later. Creating a Memorandum of Charitable Intent helps ensure your philanthropic legacy will continue to reflect your values over time.

The Community Foundation for Monterey County is available as a resource for donors interested in exploring giving options, adapting to new rules and staying connected to local impact. A conversation about personal goals and giving preferences can be a valuable first step.

Giving is ultimately about people, purpose, and possibility. With thoughtful planning, generosity can remain a constant — even as the tax landscape evolves.

2026 Charitable Deduction Updates

New itemized deduction limits

Donors who itemize deductions will only be able to deduct charitable gifts that exceed 0.5% of their adjusted gross income (AGI), and the total deduction for charitable gifts may be capped at 35% of AGI, even if their tax rate is higher.

New standard deduction charitable benefit

Taxpayers who take the standard deduction can claim a modest “above-the-line” charitable deduction of up to $1,000 for single filers and $2,000 for married couples filing jointly.

IRA Qualified Charitable Distributions (QCDs)

These direct gifts from an IRA for individuals age 70½ or older continue unchanged and do not count as itemized deductions, making them a valuable giving option under the new rules.