The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. This comprehensive legislation includes several provisions that will significantly impact charitable giving strategies across our region.
Three Critical Changes for Donors
1. Higher Standard Deduction Reduces Tax Incentives
What Changed: The OBBBA permanently extends the higher standard deduction ($15,750 for individuals, $31,500 for married couples filing jointly) and introduces new limitations on charitable deductions for itemizers.
Impact: Fewer taxpayers will itemize deductions, continuing the trend that has reduced charitable giving incentives since 2017. High-income donors will see reduced tax benefits from charitable gifts.
Action Steps: Continue supporting the causes you care about regardless of tax benefits. Consider strategic giving approaches that maximize impact while navigating new limitations.
2. New Deduction for Non-Itemizers
What Changed: Starting in 2026, taxpayers who don't itemize can deduct charitable gifts up to $1,000 (individuals) or $2,000 (married couples). This provision is permanent and excludes donor advised fund gifts.
Impact: This could re-energize charitable giving among middle-income households who haven't received tax benefits from giving since 2017.
Action Steps: If you don't currently itemize, this may be an opportunity to establish or expand your charitable giving. Consider establishing a fund at the Community Foundation to maximize your impact in our community.
3. Permanent Estate Tax Exemption
What Changed: The OBBBA permanently extends higher estate tax exemptions—$13.99 million for individuals in 2025, rising to $15 million in 2026.
Impact: Estate tax-driven charitable giving will remain limited to ultra-wealthy families, with most donors continuing to give for personal and community values rather than tax considerations.
Action Steps: High-net-worth families now have more time to thoughtfully plan estate strategies, including charitable legacy planning.
Looking Ahead
Greater Toledo Community Foundation remains committed to helping donors navigate these changes and maximize their charitable impact. Our flexible giving options and expert guidance ensure your philanthropy strengthens our community for generations.