What the “One Big Beautiful Bill Act” Means for 2026 Charitable Giving
...and why the ImpactAssets Donor Advised Fund can help before year end.
With 2026 coming to a close, donors have a limited window to revisit their year-end giving strategy that takes into account the One Big Beautiful Bill Act (OBBBA)’s new charitable giving rules.
Key Takeaways
- New rules apply to 2026 gifts. Donors should be aware of OBBBA’s new AGI floor (0.5% for itemizers) and the 35% deduction cap for top-bracket donors.
- “Bunching” may be beneficial. Aggregating multiple years of giving into one 2026 gift helps clear the new AGI floor more efficiently than annual gifts. DAFs are an ideal vehicle for aggregated gifts.
- A DAF separates the tax decision from the giving decision. Contributing now locks in this year's deduction while you decide which nonprofits and impact investments to pursue.
- Appreciated assets beat cash. Donating stock, business interests and other noncash assets that have been held for more than a year may reduce capital gains tax, stacking additional savings on top of the deduction, especially valuable in a high-income year (IPO, sale, bonus, etc.).
What Changed in 2026
Beginning January 1, 2026, OBBBA introduced several adjustments to how charitable contributions are treated for tax purposes. These changes are already in effect for gifts made in 2026, so they directly affect any giving you do before year end.
- For itemizers: Deductions apply only to gifts that exceed 0.5% of adjusted gross income (AGI), creating a new “floor” before charitable deductions begin. Cash contributions to DAFs cannot be deducted for non-itemizers.
- For high-income taxpayers: Those in the 37% bracket will see their charitable deduction benefit capped at 35% of the donation’s value.
Given these changes, high earners may benefit from revisiting their charitable giving strategy for 2026.
How The ImpactAssets Donor Advised Fund Can Help
A donor advised fund (DAF) lets you separate the giving decision from the tax decision. You can donate now, lock in this year’s deduction, and decide which nonprofits to support later. OBBBA’s new rules make that separation more valuable than ever.
- Consider donating appreciated assets. Contributing publicly traded stock, concentrated stock positions, private business interests and real estate may reduce capital gains tax and could clear the new AGI floor more easily than a cash gift.
- Bunch multiple years into one gift. Contributing several years’ worth of giving to your DAF in 2026 helps exceed the 0.5% floor now. You can recommend grants over the following years at your own pace.
- Invest donated assets for positive impact. Contributions to an ImpactAssets Donor Advised Fund can be invested in funds and companies that align with your values. Invest in sectors such as renewable energy, sustainable agriculture, affordable housing and health equity, all while you take the time to plan your long-term giving strategy.
What this Looks Like in Practice*
CASH CONTRIBUTIONS
A donor with $1M AGI giving $100,000 a year hits the 0.5% floor annually, forfeiting a small deduction each time. Contributing three years at once ($300,000) hits the floor only once — preserving roughly $10,000 more in deductible giving.
That same $300,000 gift is even more effective when funded with appreciated stock rather than cash: donating shares held for years avoids capital gains tax on the appreciation entirely, adding tens of thousands more in tax savings on top of the deduction.
APPRECIATED ASSETS
The ability to donate appreciated assets is especially relevant for donors with long-held, highly appreciated stocks, or individuals whose company went public recently. These individuals may have a highly concentrated position in their portfolio that they want to reduce while limiting taxes.
Consider a founder whose company recently went public. Her 2026 AGI is $15M, and her position has a very low cost basis. She donates $4M of shares with a $200,000 basis to her DAF:
Had she sold the shares first and donated the after-tax proceeds, her DAF would have received about $3.1M instead of $4M. While complex assets are nuanced by nature, ImpactAssets has the expertise to handle them. Accepted assets include (but are not limited to):
- Publicly traded stock
- Pre-IPO stock
- Cryptocurrency
Because complex and restricted assets take time to transfer, we recommend engaging with us early to ensure your gift is completed in 2026.
*These case studies are entirely hypothetical and provided for illustrative purposes only. The scenarios do not include state and local taxes in their calculations. They do not depict any actual donor. Consult your tax advisor on strategies that make sense for your unique situation.
Why Year-End Timing Matters
The new AGI floor and the cap on high-bracket deductions apply to the calendar year in which a gift is made. That means decisions made before December 31 determine what counts toward this year’s deduction.
High-income years are the highest-value giving years. Donors with a liquidity event, IPO, business sale, carried interest payout, or large bonus in 2026 have the most to gain from giving before year end. Large gifts concentrated in high-income years are more tax-efficient under the new rules.
Take Action Before Year End
The December 31 deadline is coming up. Talk to your advisor and build or revise your giving strategy that takes into account OBBBA’s new rules, especially if you are experiencing an extraordinary income year.
LEGAL AND PROGRAM DISCLAIMER: This is not a solicitation to buy or sell securities, nor a private placement offering pursuant to any private placement memorandum that must be issued to qualified investors. It is an informational description of charitably oriented, social purpose investment options that have been approved by ImpactAssets only for use in its donor advised fund asset base. It is only for use by its donors. This does not constitute tax advice. Please note there are a number of factors to consider when assessing the tax implication of gifts to charity. Individuals should consult with a tax specialist before making any charitable donations.
ImpactAssets Capital Partners PB LLC (“IA Capital”) is an investment adviser registered with the SEC. The content of this website is not a solicitation or offer to sell investment advisory services, nor is it a solicitation or offer to sell securities. All content of this website is for informational purposes only and should not be relied upon as investment advice. Information is subject to change at any time, and IA Capital is under no obligation to provide updates or amendments. Investment in securities involves the risk of loss. Past performance is no guarantee of future returns.
