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Hello from the community foundation!
We hope you are staying warm during these winter months. As always, we’re happy to share what’s trending across the charitable giving world. Whether you established a fund at the community foundation years ago or recently, or you’re thinking about doing so this year, we are here for you.
—New tax laws effective in 2026 could significantly influence how charitable giving fits into your overall financial plan. The community foundation team is happy to share information about key changes, including new deduction thresholds, limits for high-income donors, incentives for non-itemizers, and expanded opportunities for retirees. Consider sharing our updates with your tax advisors while also keeping the community foundation in the loop. We stand ready to assist!
—A new year is the perfect time to bring intention and clarity to your charitable giving. Lean on the community foundation’s checklist of three simple steps to help you reflect on past giving, understand how new tax laws may affect you, and set meaningful goals for the year ahead. You won’t regret getting an early start, and our team is here to help.
—Life insurance can be a powerful but often overlooked tool for achieving your charitable and legacy goals. The community foundation is happy to work with you and your advisors to evaluate life insurance strategies to complement your donor-advised fund and other giving vehicles as part of your well-rounded charitable plan.
Thank you for allowing us to serve as your home for charitable giving! We’d welcome a conversation about your goals for charitable giving in 2026 and beyond. Getting a jump on the planning process is a great way to start a new year off on the right foot.
Warmly,
Angie Tatro
CKCF CEO
Charitable tax law changes for 2026: Keeping your tax advisors in the
loop
At the community foundation, we are honored to serve as your home for charitable giving. Whether you support a wide range of charitable organizations in our community and across the country, focus your giving on a few favorite local causes, collaborate with the community foundation to invest in our region’s greatest needs, or all of the above, we are here for you!
A new year presents an excellent opportunity to check in on your charitable giving priorities. This is the case every year, but it is especially important in 2026 not only because of the crucial priorities to improve our community’s quality of life, but also because of a few new tax laws that may impact charitable giving strategies for some people.
Here are the changes that you’ll want to be aware of, and, most importantly, share with your tax advisors as soon as possible to determine how these changes might impact your situation. Forward this article to your tax advisors, or print it and take it to your next meeting.
New threshold to itemize charitable deductions
One of the most significant shifts affects individual taxpayers who itemize their income tax deductions. Beginning this tax year, charitable contributions will only be deductible to the extent that they exceed 0.5% of a taxpayer’s adjusted gross income. In practical terms, this means that a portion of charitable giving will no longer generate a tax benefit. For example, a taxpayer with an adjusted gross income of $200,000 will see no deduction for the first $1,000 of charitable contributions made in a year. Only donations above that amount will be eligible for deduction, subject to existing percentage-of-income limits. This new rule functions much like a deductible in an insurance policy, raising the effective threshold for receiving a tax benefit and reducing the immediate incentive for smaller annual gifts among itemizers.
Limitation on itemized charitable deductions for high-income taxpayers
High-income taxpayers will face an additional limitation through a new cap on the value of itemized charitable deductions. Even if a donor is in the highest federal income tax bracket, the tax benefit of a charitable deduction will be limited to 35 percent of the contribution. As a result, taxpayers in the 37 percent bracket will no longer be able to offset their income at their full marginal rate when making charitable gifts.
Good news for the 60% cap
Another important change provides greater certainty for donors who make substantial cash contributions. The long-standing rule allowing cash gifts to qualified public charities to be deducted up to 60 percent of adjusted gross income has been made permanent. After satisfying the new 0.5% AGI floor, donors may continue to deduct cash contributions up to this level, while non-cash gifts or contributions to certain types of organizations remain subject to lower percentage limits. This permanence preserves a relatively generous framework for major philanthropy even as other rules become more restrictive.
New incentive for non-itemizers
The new rules introduce an incentive for taxpayers who do not itemize deductions. Beginning with the 2026 tax year, individuals who claim the standard deduction will be allowed to take a limited charitable deduction above the line, meaning it reduces income before adjusted gross income is calculated. Single filers may deduct up to $1,000, while married couples filing jointly may deduct up to $2,000, provided the contributions are made in cash. This deduction is available in addition to the standard deduction and represents a meaningful expansion of tax benefits for charitable giving among non-itemizers, many of whom have received no tax benefit for donations in recent years. Note, however, that gifts to donor-advised funds are not eligible for this deduction, and neither are noncash gifts. This is unfortunate because both gifts to donor-advised funds and gifts of highly appreciated assets are useful tools that incentivize charitable giving.
QCDs may be even more useful
Retirees and older taxpayers will also see an important adjustment through an increase in the Qualified Charitable Distribution limit. Beginning in 2026, the annual amount that can be transferred directly from an individual retirement account to a qualified charity will increase, allowing taxpayers age 70 ½ and older to direct more funds to charitable causes without including those distributions in taxable income. Because Qualified Charitable Distributions can also count toward required minimum distributions, this higher limit enhances a tax-efficient giving strategy that is unaffected by itemized deduction limits, adjusted gross income floors, or caps on deduction value.
Limitations on corporate charitable deductions
Corporate donors are not exempt from the new framework. Starting in 2026, corporations may deduct charitable contributions only to the extent that those contributions exceed 1 percent of taxable income. Contributions below that threshold will not generate a current-year deduction, although amounts that exceed applicable limits may be carried forward to future tax years. This new floor is likely to influence corporate giving strategies, particularly for businesses that make consistent but relatively modest charitable contributions. The existing 10% cap on corporate charitable deductions remains in place.
Again, we strongly encourage you to forward this information to your tax advisors. Please loop us into the conversation so that we can work alongside your attorney, financial advisor, and CPA to ensure that you’re set up to meet your charitable goals for 2026 through strategies that also align with your tax, financial, and estate planning objectives. Whether you cc us on an email, ask your advisor to get in touch with us directly, or pull everyone together on a quick call or Zoom, we are here for you and look forward to the conversation!
Charitable tax law changes for 2026: Keeping your tax advisors in the loop
At the community foundation, we are honored to serve as your home for charitable giving. Whether you support a wide range of charitable organizations in our community and across the country, focus your giving on a few favorite local causes, collaborate with the community foundation to invest in our region’s greatest needs, or all of the above, we are here for you!
A new year presents an excellent opportunity to check in on your charitable giving priorities. This is the case every year, but it is especially important in 2026 not only because of the crucial priorities to improve our community’s quality of life, but also because of a few new tax laws that may impact charitable giving strategies for some people.
Here are the changes that you’ll want to be aware of, and, most importantly, share with your tax advisors as soon as possible to determine how these changes might impact your situation. Forward this article to your tax advisors, or print it and take it to your next meeting.
New threshold to itemize charitable deductions
One of the most significant shifts affects individual taxpayers who itemize their income tax deductions. Beginning this tax year, charitable contributions will only be deductible to the extent that they exceed 0.5% of a taxpayer’s adjusted gross income. In practical terms, this means that a portion of charitable giving will no longer generate a tax benefit. For example, a taxpayer with an adjusted gross income of $200,000 will see no deduction for the first $1,000 of charitable contributions made in a year. Only donations above that amount will be eligible for deduction, subject to existing percentage-of-income limits. This new rule functions much like a deductible in an insurance policy, raising the effective threshold for receiving a tax benefit and reducing the immediate incentive for smaller annual gifts among itemizers.
Limitation on itemized charitable deductions for high-income taxpayers
High-income taxpayers will face an additional limitation through a new cap on the value of itemized charitable deductions. Even if a donor is in the highest federal income tax bracket, the tax benefit of a charitable deduction will be limited to 35 percent of the contribution. As a result, taxpayers in the 37 percent bracket will no longer be able to offset their income at their full marginal rate when making charitable gifts.
Good news for the 60% cap
Another important change provides greater certainty for donors who make substantial cash contributions. The long-standing rule allowing cash gifts to qualified public charities to be deducted up to 60 percent of adjusted gross income has been made permanent. After satisfying the new 0.5% AGI floor, donors may continue to deduct cash contributions up to this level, while non-cash gifts or contributions to certain types of organizations remain subject to lower percentage limits. This permanence preserves a relatively generous framework for major philanthropy even as other rules become more restrictive.
New incentive for non-itemizers
The new rules introduce an incentive for taxpayers who do not itemize deductions. Beginning with the 2026 tax year, individuals who claim the standard deduction will be allowed to take a limited charitable deduction above the line, meaning it reduces income before adjusted gross income is calculated. Single filers may deduct up to $1,000, while married couples filing jointly may deduct up to $2,000, provided the contributions are made in cash. This deduction is available in addition to the standard deduction and represents a meaningful expansion of tax benefits for charitable giving among non-itemizers, many of whom have received no tax benefit for donations in recent years. Note, however, that gifts to donor-advised funds are not eligible for this deduction, and neither are noncash gifts. This is unfortunate because both gifts to donor-advised funds and gifts of highly appreciated assets are useful tools that incentivize charitable giving.
QCDs may be even more useful
Retirees and older taxpayers will also see an important adjustment through an increase in the Qualified Charitable Distribution limit. Beginning in 2026, the annual amount that can be transferred directly from an individual retirement account to a qualified charity will increase, allowing taxpayers age 70 ½ and older to direct more funds to charitable causes without including those distributions in taxable income. Because Qualified Charitable Distributions can also count toward required minimum distributions, this higher limit enhances a tax-efficient giving strategy that is unaffected by itemized deduction limits, adjusted gross income floors, or caps on deduction value.
Limitations on corporate charitable deductions
Corporate donors are not exempt from the new framework. Starting in 2026, corporations may deduct charitable contributions only to the extent that those contributions exceed 1 percent of taxable income. Contributions below that threshold will not generate a current-year deduction, although amounts that exceed applicable limits may be carried forward to future tax years. This new floor is likely to influence corporate giving strategies, particularly for businesses that make consistent but relatively modest charitable contributions. The existing 10% cap on corporate charitable deductions remains in place.
Again, we strongly encourage you to forward this information to your tax advisors. Please loop us into the conversation so that we can work alongside your attorney, financial advisor, and CPA to ensure that you’re set up to meet your charitable goals for 2026 through strategies that also align with your tax, financial, and estate planning objectives. Whether you cc us on an email, ask your advisor to get in touch with us directly, or pull everyone together on a quick call or Zoom, we are here for you and look forward to the conversation!
Underappreciated and overlooked: Why life insurance matters to
charitable giving
Even in an era when term life insurance policies may appear to dominate, many people still hold whole life, variable life, or universal life insurance policies. In many cases, when the original need for a policy goes away (e.g., children become independent or other assets have increased to fill risk gaps), a policyholder may be left wondering what to do with the policy.
Before cashing in a policy, it’s worth knowing that life insurance can play a meaningful and often overlooked role in charitable giving. A common approach is naming a charity as the beneficiary of a life insurance policy, either in full or in part. This strategy enables a donor to make a significant future gift at a relatively modest current cost of the annual premiums, particularly when the policy is already in force. For someone who has established a donor-advised or other type of fund at the community foundation, this method may align well with estate planning goals because the death benefit passes directly to the fund outside of probate and may help reduce the taxable value of the estate.
Another way insurance policies are used in philanthropy is through the donation of an existing policy to the community foundation or other charitable organization. In this case, actual ownership of the policy is transferred to the charity, which then becomes both the owner and beneficiary. The donor may be eligible for an income tax deduction equal to the policy’s fair market value, generally based on its “interpolated terminal reserve” plus unearned premium, subject to applicable limitations. If the policy still requires premium payments, donors can continue funding those payments through additional tax-deductible contributions to the community foundation or other charity, effectively converting future premium dollars into charitable gifts.
Finally, donors can use insurance creatively in more advanced charitable planning strategies. For example, a donor may purchase a new policy specifically for charitable purposes, often using annual contributions to fund premiums over time, or combine insurance with vehicles such as charitable trusts or donor-advised funds to enhance long-term giving impact. In some cases, insurance helps replace wealth passed to charity so heirs are not financially disadvantaged, allowing donors to balance philanthropic intent with family goals. Through these approaches, insurance policies offer flexibility, leverage, and tax efficiency, making them a valuable tool in a well-rounded charitable giving plan.
If you are interested in learning more about how your life insurance policies can help you achieve your charitable goals, we encourage you to consult your financial advisor about the details and then reach out to the team at the community foundation. In particular, we are happy to help evaluate how life insurance gifts might fit alongside–or integrated with–other giving vehicles, such as donor-advised funds and legacy funds. We are here for you!
