"President Donald Trump's " One Big Beautiful Bill," signed into law this July, will limit tax benefits for wealthy donors starting in 2026. The new ceiling will cut the effective tax benefit from 37% to 35%. The legislation also suppresses tax breaks for itemizers-they'll only be able to deduct donations in excess of 0.5% of their adjusted gross income. Now, philanthropic organizations and research institutions are waving the warning sign:"
"It's estimated that the 35% limit will reduce donations by at least $4.1 billion, and as much as $6.1 billion, according to the Indiana University Lilly Family School of Philanthropy. It's a massive blow to charitable causes, as just a handful of billionaires give at proportions that middle-class voters won't be able to match. Under this new bill, around 140 million average taxpayers who don't itemize will still be able to deduct up to $1,000 in cash donations;"
Federal tax changes will lower the top charitable deduction rate from 37% to 35% starting in 2026 and restrict itemizer benefits so donations are deductible only above 0.5% of adjusted gross income. Research from the Indiana University Lilly Family School of Philanthropy estimates donations could fall by $4.1 billion to $6.1 billion. A small number of ultra-wealthy donors provide a large share of giving, while most middle-class households took the higher standard deduction in 2017 and cannot match those large gifts. Nonprofits warn of a significant funding shortfall for many charitable and research organizations.
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