The new tax law President Donald Trump signed over the Fourth of July holiday will have far-reaching impacts on government programs, the economy and more.

Our team at the Community Foundation of Broward has been keeping a close eye on how the new legislation, dubbed the “One Big Beautiful Bill Act,” could affect charitable giving. Here are four insights about key provisions expected to impact philanthropy:

1. Standard Deduction Increases:

The new law makes permanent the standard deduction increases under the Tax Cuts and Jobs Act of 2017 (TCJA), approved during President Trump’s first term. That increases the standard deduction for 2025 to $15,750 for single filers and $31,500 to taxpayers who are married and filing jointly. The new law also expands the “bonus” deduction for taxpayers 65 and older through 2028.

Under the new law, individuals who itemize may take charitable deductions only to the extent the charitable deductions exceed 0.5 percent of adjusted gross income. Also, taxpayers in the top bracket can only claim a 35 percent tax deduction for charitable gifts instead of the full 37 percent that would otherwise apply to their income tax rate. In addition, the final bill permanently extended the 60 percent of adjusted gross income contribution limitation for cash gifts made to certain qualifying charities.

2. Deduction Included for Non-itemizers:

The new law includes a provision, effective after 2025, allowing non-itemizers to take a charitable deduction of $1,000 for single filers and $2,000 for taxpayers who are married and filing jointly. As has been the case in the past, gifts to Donor-Advised Funds are not eligible. Unlike a previous (but smaller) similar provision, though, this law is not set to sunset.

3. Estate Tax Exemption Remains:

Under the new law, an estate tax exemption established for affluent taxpayers by the 2017 law will continue, instead of sunsetting this year. The new law makes permanent the increase in the unified credit and generation-skipping transfer tax exemption threshold. The 2025 exemption is $13.99 million for single filers and $27.98 million for married filing jointly. In 2026, these numbers increase to $15 million and $30 million respectively.

4. 1 Percent Floor for Corporate Giving:

The new law creates a 1 percent floor for corporate grantmaking. According to the Council on Foundations, that means corporations will have to contribute at least 1 percent of their taxable income to qualify for charitable tax deductions. The provision keeps the 10 percent ceiling (on the percentage of their taxable income that can be claimed as charitable gifts) and allows for up to a five-year carryforward of contributions in excess of 10 percent.

What does this mean for nonprofits?

Many nonprofits are already facing financial challenges from dramatic cutbacks in government grants under the new Trump administration. Now the new law’s anticipated cutbacks to government programs could leave nonprofits filling in more gaps in health care, food assistance and other critical public services. As nonprofits’ work potentially increases, here’s how the new law could affect fundraising challenges the nonprofit sector has faced in recent years:

• Changes to standard deduction: Charitable giving in the U.S. dropped about $20 billion in 2018, after implementation of the 2017 change to the standard deduction for individual income taxes, according to a study by researchers at Indiana University and the University of Notre Dame. With fewer taxpayers eligible to itemize, and deductions capped for high-income earners, we’re likely to see a continuation of the chilling effect on charitable giving that occurred in the wake of the 2017 tax law.
• Deduction for Non-itemizers: After the 2017 law went into effect, households that itemize deductions dropped to under 10 percent. Parallel to this trend, the number of U.S. adults who give to charity in any given year has dropped over the last 20 years from nearly two-thirds to less than half, according to some studies. Against this backdrop, the new law’s deduction for non-itemizers has the potential to re-motivate charitable giving among a significant number of households.
• Estate Tax Exemption: The new law’s estate tax-based incentives to give to charity continue to apply only to the ultra-wealthy, which likely means a continuation of current taxpayer behavior.

What can you do?

• Talk to your professional advisor about how the new tax law affects you.
• If you regularly support charities, it’s important to continue to do so whether or not you’re benefiting from a tax deduction. Our nonprofits and the local residents they serve need you, now more than ever.
• Now is the time to take a serious look at your charitable giving plans to support the causes you care about over the years ahead, especially if you are not yet itemizing deductions.
• There is no guarantee that the estate tax exemption will stay high forever. As families work with their tax and estate planning advisors, many are viewing the next two years as an important window to plan ahead and thoughtfully consider estate planning strategies, including charitable giving.

We’re here to help.

Our team at the Community Foundation stands ready to help you navigate the evolving implications of the new tax law. As always, we can work in collaboration with your professional advisor to create giving strategies that will accomplish your charitable goals and amplify your impact. Together, we can shape a brighter future for the community we love.

To learn more about partnering with the Community Foundation to create bold impact, contact Vice President of Philanthropic Services Kelly Marmol at kmarmol@cfbroward.org or 954-761-9503.

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