Earlier this year we wrote about the good news in the 2026 tax law — the return of a deduction for donors who take the standard deduction. There is a second change in the same law that most faith-based nonprofits have not talked about at all, and it moves in the opposite direction for your larger, itemizing donors.
Beginning with 2026 gifts, itemizers can only deduct charitable contributions above 0.5% of their adjusted gross income. Everything below that floor no longer counts. For a household with $200,000 in income, the first $1,000 of giving produces no deduction. It is a small percentage, but it lands squarely on the mid-level and major donors many ministries lean on most.
Why this matters for the donors who carry your budget
Faith-based giving tends to be steady and relational. The couple who gives the same monthly gift year after year, the family that itemizes and tithes faithfully — these are the households the new floor quietly touches. Nothing about their generosity changes. What changes is how the tax code rewards it, and donors who plan their giving deserve to hear that clearly.
This is not a reason for anyone to give less. It is a reason to help thoughtful givers give wisely, which has always been part of good stewardship.
The practical response: bunching and donor-advised funds
The clearest way donors can work around the floor is to concentrate giving into fewer, larger years rather than spreading it evenly. Giving two years' worth of gifts in a single tax year clears the 0.5% floor more efficiently and can push a household over the standard deduction so itemizing pays off at all.
For many faithful givers, a donor-advised fund makes this simple. They contribute a larger sum in one year, take the deduction that year, and recommend grants to your ministry on their normal schedule. Your cash flow stays steady; their tax planning gets cleaner. We covered how these funds work in a separate post, and this new floor makes them more relevant than before.
What to put on your giving page now
You do not need a tax seminar on your website. You need one honest, plain-language note near your giving form and in your year-end letter — something like: "For 2026, itemizing donors can deduct charitable gifts above 0.5% of income. Concentrating gifts into a single year or using a donor-advised fund can help. Please talk with your tax advisor."
That is it. Link "donor-advised fund" to a short explainer if you have one. Point people to their own CPA for specifics. The goal is not to give tax advice — it is to show your donors you are paying attention to their generosity as carefully as they are.
Most ministries will let the whole year pass without mentioning this once. The ones who add a few sentences now, well before December, give their most committed givers time to plan — and communicate a quiet message of respect in the process.
If you would like help updating your donation page or year-end giving messaging to reflect the 2026 changes, we would be glad to talk.