If charitable giving has been on autopilot — a check to the church, a year-end gift to the alumni fund, a wire to the food bank — the rules just changed in ways that make autopilot the most expensive way to give.
Three changes from the One Big Beautiful Bill Act (OBBBA) hit in 2026. The standard deduction is now $32,200 for married filing jointly, made permanent. For a family whose itemized deductions together don’t clear that number, charitable giving produces no federal tax benefit. Second, even for families who do itemize, the first 0.5% of AGI in charitable contributions is no longer deductible — a new floor. Third, for households with taxable income in the 37% bracket (above $768,700 MFJ in 2026), all itemized deductions, charitable included, are now limited to a 35% benefit rather than the 37% marginal rate. The rules quietly raised the cost of giving without a plan.
Two structures help families navigate the new rules. The donor-advised fund (DAF) lets a family fund several years of giving in a single tax year and recommend grants to charities over time. The mechanic is “bunching” — instead of giving $20,000 a year for five years, fund a DAF with $100,000 in one year. The single contribution pushes total itemized deductions above the standard deduction once, and concentrates the non-deductible 0.5% AGI floor into one year instead of absorbing it five times. Funded with long-term appreciated stock rather than cash, the family also avoids embedded capital gains tax on the donated shares — up to 23.8% federal savings on the appreciation for top-bracket donors. (Gifts of appreciated stock are limited to 30% of AGI per year, with a five-year carryforward.)
For individuals over 70½ with IRA assets, the qualified charitable distribution (QCD) often offers the most tax-efficient path. Up to $111,000 per person can transfer directly from an IRA to a qualified public charity in 2026. The amount never enters taxable income, satisfies the required minimum distribution dollar-for-dollar once RMDs begin, and bypasses both the 0.5% AGI floor and the 35% deduction cap — because it’s an exclusion from income rather than a deduction. QCDs must go directly to an operating public charity; they cannot be directed to a DAF or private foundation.
If your annual giving is meaningful, the structures are worth revisiting before year-end planning gets compressed.
For informational and educational purposes only. Not investment, tax, or legal advice. Lake Hills Wealth Management is a Registered Investment Advisor registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply a certain level of skill or training. Our current Form ADV, Part 2A is available at adviserinfo.sec.gov.