Charitable Giving Opportunities and Challenges in the OBBB
The recently passed One Big Beautiful Bill (OBBB) made several changes that will affect charitable givers. Today’s blog will focus on how the bill will affect different givers and how church and ministry leaders can position their organizations to help people be better stewards.
Three groups affected by the OBBB’s charitable giving changes:
Cash Givers: People who put cash in the plate or the offering box have an incentive to become systematic givers.
Potential Itemizers: Taxpayers whose itemized deductions were 50%-100% of the standard deduction in 2025 can save money by bunching (combining multiple years’ worth of charitable donations into a single tax year).
Committed Contributors: Those who could stand to lose the most from the bill, depending on their wealth level.
Cash Givers
The bill creates a fantastic opportunity for cash givers to become systematic givers. Beginning in 2026, the OBBB significantly alters the incentives for cash givers by allowing non-itemizing individuals to deduct $1,000 of charitable contributions and non-itemizing married couples to deduct $2,000. For a couple who contributes an average of $100 each month ($1,200 per year), giving cash costs them the full $1,200. If they switch to systematic giving, they can deduct the $1,200 from their income, saving them $264 if they are in the 22% tax bracket.
From the church’s perspective, the potential for increased donations is just a small part of the benefit. The financial discipleship of a regular attender who gives cash is likely lagging in other areas of their discipleship journey. The tax code has provided them with every incentive to make a change. If you are a pastor or financial leader in the church, don’t miss the opportunity to offer money-saving wisdom—like systematic giving—to help develop your people as thriving Kingdom stewards.
Potential Itemizers
Only about 10% of taxpayers itemize. The OBBB makes itemizing more attractive for some of them. For savvy savers, it creates an opportunity to reduce their tax burden further by bunching charitable contributions and property taxes. At first glance, the bill reduces the number of charitable itemizers. Effective in the 2026 tax year, itemizers who make charitable contributions will only be able to claim a tax deduction to the extent that their qualified contributions exceed 0.5% of their adjusted gross income (AGI). However, the increase in the SALT (State and Local Taxes) deduction from $10,000 to $40,000 will dwarf the 0.5% exclusion for many taxpayers.
Both changes make bunching contributions more attractive. You could avoid the 0.5% exclusion every other year by bunching your charitable contributions into one year using a donor-advised fund. You can use the non-itemized charitable deduction for any extra gifts if you don't itemize in the off year. Paying two years of property taxes in the same year as your big donation year allows an even larger potential deduction. Purchasing a charitable gift annuity in the year you itemize is likely to bring additional deductions. To pull this off, you must be a savvy saver who can accumulate the necessary dollars for bunching. The rewards are now higher than they used to be. (Disclosure: Orchard Alliance offers donor-advised funds and charitable gift annuities.)
Committed Contributors
Who fares the worst under this bill? High-income givers who live in their RVs and claim residence in a low-income tax state. Charitable deductions for the highest income tax rate (37%) will only be deducted at the 35% tax rate. They also lost the first deduction of some donations as per the 0.5% exclusion and don’t own enough property to benefit from the increased SALT deduction. If you are in this group, complain to every congressperson in whose district you park your RV.
Here is a quick summary of the impact on more common situations:
Systematic givers not giving enough to itemize: You get a tax deduction on your first gifts unless you bunch your contributions.
Itemizers with property: The SALT deduction increase counteracts the 0.5% exclusion of your charitable contributions. Your property values and tax rate will determine whether you experience a slight loss or a modest gain.
High-income donors: The same as other itemizers, with the added cost of only being able to deduct at the 35% rate.
The net effect of the OBBB seems positive for financial discipleship, as it encourages more people to be systematic givers. That is a big step for those who love Jesus but haven’t shaken the world’s materialistic pull. For savvy donors, the opportunities have increased. A little planning can produce a high return. And if you drive around an RV, keep focusing on the joy of travel and that you haven’t had to call a home repair person all year.
