What’s Different About Year-End Giving This Year

Estimated read time: 4 minutes

Written by Cassie Rice, Chief Operating Officer

Every December, a few gifts arrive that you didn’t expect. And a few you counted on don’t.

This year, a change in federal tax law may explain some of both.

The One Big Beautiful Bill Act, signed in July 2025, changed how charitable gifts are deducted starting with the 2026 tax year. That makes this the first year-end under the new rules. Your donors’ advisors know it. Your development team should too.

A quick note before we dive in: this is not tax advice. Your donors should always rely on their own advisors and you should form a “dotted line” relationship with your organization’s CFO. 

Your job is simply to understand the landscape well enough to have a smart, comfortable conversation.

The Three Changes That Matter Most

1. Donors who don’t itemize can now deduct cash gifts.

Taxpayers who take the standard deduction can deduct up to $1,000 in cash gifts, or $2,000 for married couples filing jointly. The gift has to go directly to a qualifying public charity. Gifts to donor-advised funds don’t count.

This matters most for your broad donor base, not your top prospects. But it gives your annual appeal a timely, positive message: for many donors, their gift now carries a tax benefit it didn’t have before.

2. Itemizers now face a floor of 0.5% of income.

For donors who itemize, only charitable gifts above 0.5% of adjusted gross income are deductible. A donor with $500,000 in income, for example, gets no deduction for the first $2,500 they give.

This is the change most likely to affect your major donors’ timing. Many advisors are recommending “bunching,” which means making larger gifts every two or three years instead of steady annual gifts. Some donors also moved gifts into 2025 to get ahead of the new rules.

3. The tax benefit is capped at 35% for the top bracket.

Donors in the highest tax bracket now receive a slightly smaller tax benefit from each charitable dollar. It’s a modest change, and it rarely decides whether a donor gives. But they may mention it, so it helps to know.

What Stays the Same

Some of the most useful giving tools still work just as they did:

• Gifts of appreciated stock still let donors avoid capital gains tax on the growth.
• Qualified charitable distributions from IRAs, for donors 70½ and older, are not affected by the new 0.5% floor.
• The 60% limit on deducting cash gifts to public charities is now permanent.

For many major donors, these options just became even more attractive.

What This Means for Your Year-End Conversations

Look at last year’s gift before you call.

Did this donor give an unusually large gift in December 2025? They may have been giving ahead of the new rules. A smaller gift this year isn’t a sign they’ve lost interest. It may simply be timing.

Ask, don’t assume.

A simple question opens the door: “How are you thinking about your giving this year?” Then listen. You’ll learn more from that answer than from any wealth screening.

Make every way of giving easy.

Make sure your team can receive stock transfers, IRA distributions, and grants from donor-advised funds smoothly. Publish your year-end deadlines early. Stock transfers in particular take time.

Open a multi-year conversation.

If a donor is bunching, that’s a wonderful opening to talk about a pledge over two or three years. You give them a plan that works for their finances, and you give your organization predictability.

Remember your board.

Board members are donors too, and many will be making these same decisions. A brief update at your next board meeting shows them you’re paying attention.

Lead With Mission, Not Tax Law

Here’s what hasn’t changed at all: donors give because they believe in your work. Tax benefits may shape the timing and the method, but they rarely shape the decision.

So know the rules. Be ready with options. And then let your conversations do what they always do best, which is connect your donors to the impact they want to make.

If you’d like help shaping your strategy for your top donors, send us a note at c.rice@gailperry.com.