Giving Is Changing

Tax law changes taking effect on January 1, 2026 open new doors for individuals and organizations supporting Southern Arizona’s nonprofits.

In 2026, a variety of changes to tax law will make it a different playing field for nonprofits and donors alike. And in the same way our nonprofit friends are so adept at powering through challenges, we’re here to help you understand the changes and plan your approach to giving – in 2025 and beyond.

To maximize giving in 2025, consider the following strategies:

Bunch your gifts. If you have the means, consider front-loading a large contribution into a donor advised fund before December 31, 2025. This allows you to recommend grants over time while maximizing tax benefits.

Donate from your IRA. If you’re over 70 1/2, you can make a Qualified Charitable Distribution (QCD) directly from your IRA to charity, potentially lowering your taxable income. CFSA’s Impact Funds are a great destination because they combine your gift with others for a greater impact.

Make a bold, unrestricted gift. A larger-than-usual donation to your favorite charity before the year-end in 2025 may offer greater tax advantages and greater impact.

Understanding Changes for Charitable Giving

If you are looking to make the most out of your 2025 donations, now is a great time to consult with a tax advisor to consider current and upcoming tax benefits for charitable giving. Here’s a summary of tax law changes you could discuss with your advisors:

Beginning in 2026, anyone taking a standard deduction can deduct an additional amount for charitable gifts, up to $1,000 for individuals and $2,000 for a married couple filing jointly – even if they don’t itemize. This deduction excludes gifts to donor advised funds.
A permanently higher deduction limit on cash gifts is now codified in the law. In other words, the current 60% of AGI cap on deductions for cash gifts to public charities is now permanent. While that’s good news, you should continue to explore whether alternatives to cash gifts can provide tax and planning benefits that are better aligned with your goals and circumstances.
If you are 65 or older, you may claim an additional $6,000 deduction in tax years 2025–2028, whether you itemize or not. The deduction phases out once your modified AGI exceeds $75,000 (single filers) or $150,000 (joint filers). This may free up additional money for meeting charitable goals.
Qualified charitable distributions (QCDs) from Individual Retirement Accounts (IRAs) may be even more valuable after the passage of the new tax law. The real benefit in QCDs is that the amount transferred to a charity reduces the IRA owner’s required minimum distribution amount which is generally subject to tax.

A Deeper Dive into the Impacts on Donors Who Itemize

For those who do itemize, the remaining stretch of 2025 offers an opportunity to accelerate your giving now to get ahead of changes that limit tax deductions to less than 100% of giving.

The new law creates a ‘floor’ for giving that must be achieved before deductions can be taken in 2026. Instead of counting from the first dollar donated, now you must donate more than .5% of Adjusted Gross Income (AGI) before charitable contributions are deductible. For example, a couple filing jointly whose adjusted gross earnings are around $150,000, only the excess given over $750 (.5% of AGI) will be deductible in 2026. As mentioned above, QCDs may be an effective way of giving for those who itemize their deductions in 2026, as QCDs can avoid the impact of the new floor created in the law which disallows a portion of the charitable contribution deduction.
There is a cap on the value of the charitable contribution deduction, which limits that value to 35% tax benefit even if the tax bracket is higher, which means people in the highest tax bracket can’t get a dollar-for-dollar value from contributions starting in 2026.

CFSA is Here to Help

As we approach the end of the year, it is a great time to consult with your advisors on the upcoming tax law changes, and reach out to CFSA’s Philanthropy team to learn more about how we can partner with you to support the organizations and causes you care about.

Contact the CFSA Philanthropy team at philanthropy@cfsaz.org or 520-770-0800.