There’s never been a better time to make a charitable donation. Really.

As seen in The Oakland Press

December 14th, 2025

There’s never been a better time

to make a charitable donation. Really.

During the recent government shutdown, many local charities stepped up in a big way, gathering, packaging and distributing food to those in need. These charities are not just faceless names; they’re real people volunteering both their time and energy.

According to a recent report by the Indiana University Lilly Family School of Philanthropy, Americans donated an unbelievable $392.45 billion last year. Just to put that number into proper perspective, the amount given in 2020 was just shy of $324 billion. This shows that Americans are not only generous, but digging even deeper into their pockets in recent years.

The wealthy are often criticized, but Lilly’s research indicates that, while fewer Americans are donating, the wealthy are actually increasing their contributions. But regardless of the source, every dollar donated and every hour of volunteer work does indeed matter and is deeply appreciated by those in need.

When people make donations, they receive a benefit on their income tax returns. The wealthy are very aware of how charitable donations and income tax are deeply intertwined. The greater the donation, the bigger the tax break. But there are tax law changes coming in 2026 that could adversely impact the amount of donations from the wealthy.

Beginning in 2026, for taxpayers in the highest marginal rate (37%), the tax benefit for charitable contributions will be capped. They will receive only about 35 cents in tax savings per dollar contributed. This year it’s 37 cents. That difference may appear to be insignificant, but Lilly estimated it would reduce charitable giving by at least $4 billion.

There are other 2026 tax code changes that might impact charitable contributions. Rather than itemize, it’s estimated that 90 percent of tax filers simply take the standard deduction. And they will still be able to deduct up to $1,000 of cash donations. In that respect, the tax code continues to encourage charitable contributions. Keep that in mind when you see the bell ringers stand outside in the cold.

For the 10 percent of taxpayers that itemize, however, the tax code won’t be as friendly in 2026. This time, there’s a floor. People that itemize will only be allowed to deduct documented donations that exceed 0.5% of their adjusted gross income (AGI). For example, if taxable income is $100,000, you could only deduct contributions in excess $500. (0.5% of $100,000.)

People aged 73 and older who must take required minimum distributions from IRA, 401(k) and other retirement accounts will continue to be tax advantaged by donating all or part of their distribution to a qualified charity.

As an advisor that works with a multitude of households, I continue to be impressed by people’s generosity. I believe most give from the heart to an organization that is dear to them. Any tax benefit is secondary, but certainly meaningful.

That applies to the many ultra wealthy donors as well. With their tax and legal advisors, they simply want to make certain they are contributing as tax efficiently as the law permits.

Tax laws change over the years, but the generosity of the working class, middle class and well-to-do a hasn’t changed. Uncle Sam also recognizes the importance of charitable donations. That’s why it’s important to save your receipts and consult with your financial advisor and tax preparer.

Oh look! It’s almost 2026.