Supporting Your Charitable Giving

Several important changes to charitable giving rules took effect at the beginning of 2026. As many of us finally wrapped up filing our 2025 taxes this spring (phew!), attention is already turning to how these new laws may shape charitable giving decisions in the year ahead. While tax law changes can sometimes feel technical, they also create new opportunities for thoughtful generosity — and we are already seeing donors across Santa Cruz County adapt their giving plans in meaningful ways.

A recent April 2026 article in The Wall Street Journal highlighted several important charitable giving changes now taking effect. We’ve summarized the changes described in that article to help donors understand not only what these changes mean, but also how charitable giving can continue to be personally meaningful and highly impactful.

A Charitable Deduction Returns for Non-Itemizers

One of the biggest updates is the return of a charitable deduction for people who do not itemize their taxes. Beginning in 2026, individuals who take the standard deduction may deduct up to $1,000 in charitable contributions, while married couples filing jointly may deduct up to $2,000.

For many households, this is welcome news. In recent years, fewer taxpayers have itemized deductions, meaning many donors no longer receive a direct tax benefit for charitable gifts. This new provision restores an incentive for broad-based charitable participation and reflects something we see every day at the Community Foundation: generosity is not reserved for only the wealthiest donors.

There are a few important limitations. The deduction applies only to gifts of cash made directly to qualified charities. Donations to donor-advised funds (DAFs) do not qualify for this deduction, nor do gifts of appreciated stock, real estate, or household goods.

New Limits for Itemizers and High-Income Donors

At the same time, itemizing taxpayers are facing new limits on charitable deductions. Beginning this year, itemizers lose deductions equal to 0.5% of adjusted gross income (AGI). For example, a couple with $250,000 in AGI would lose the first $1,250 of charitable deductions. Only contributions above that amount may be deducted.

In addition, for taxpayers in the highest income tax bracket, charitable deductions still provide substantial tax benefits, but beginning in 2026 the value of those deductions is slightly reduced. Under prior law, if someone was in the top 37% federal income tax bracket, every $1 charitable deduction could reduce their taxes by up to 37 cents. Under the new rule, the tax savings are effectively limited to 35 cents per $1 deducted."

Even with these changes, charitable giving remains one of the most effective ways for people to align financial planning with community impact. In response to the new rules, many advisors are encouraging donors to think strategically about the timing and structure of their giving.

Smart Strategies to Consider: Bundling, QCDs, and Planning with Purpose

One approach that continues to gain attention is “bundling” or “bunching” charitable contributions into a single year. By consolidating several years of donations into one larger gift, some donors may still exceed the standard deduction threshold and maximize tax benefits while continuing to support the causes they care about over time. To note, in 2026, the standard deduction rises to $16,100 for single filers and $32,200 for married couples filing jointly.

Another strategy that remains especially valuable for older donors is the Qualified Charitable Distribution, or QCD. Importantly, none of the recent federal tax law changes affected QCDs. For donors age 70½ and older with traditional IRAs, QCDs continue to be one of the most tax-efficient ways to give.

A QCD allows an individual to transfer funds directly from an IRA to a qualified charity, potentially satisfying required minimum distributions while avoiding taxable income on the withdrawal. For many retirees, this creates a meaningful opportunity to support charitable organizations while simplifying their tax picture.

At the Community Foundation, we are seeing a significant increase in QCD activity as donors explore smart and flexible ways to support both immediate community needs and long-term charitable goals. Many donors are using QCDs to support local initiatives in scholarships, youth development, the arts, environmental stewardship, health and human services, and programs that assist vulnerable families throughout Santa Cruz County.

Giving with Confidence

While tax considerations are rarely the sole motivation for generosity, thoughtful planning can help donors give more effectively and with greater confidence. Whether someone is making an annual gift, considering gifting appreciated assets, or exploring legacy giving options, these conversations are becoming increasingly important in today’s changing tax environment.

As always, we encourage donors to consult with their financial, legal, and tax advisors regarding their individual circumstances. The Community Foundation is also here as a resource to help donors and professional advisors explore charitable strategies that align with both philanthropic goals and financial planning.

Even as tax laws evolve, one thing remains constant: your thoughtful generosity continues to create lasting impact for Santa Cruz County.