The One Big Beautiful Bill Act’s (OBBBA) updates to the charitable deduction are already changing how donors think about timing, size, and even the form of their gifts, because the new floors under IRC Sec. 170 make it harder for smaller, steady contributions to generate a tax benefit. 

According to Reuters, beginning in 2026, individual itemizers can deduct only aggregate charitable contributions that exceed 0.5% of adjusted gross income, and for taxpayers in the top bracket, the deduction is effectively capped, reducing the benefit from 37% to 35%. Corporations face a parallel shift, since C corporations may only deduct charitable donations to the extent they exceed 1% of taxable income, even as the existing 10% ceiling remains in place, while non-itemizers now have a permanent cash-contribution deduction capped at $1,000 for single filers and $2,000 for joint filers. 

Against that backdrop, donor-advised funds are getting fresh attention as a tool for “bunching,” since donors can make a large deductible contribution in one year and recommend grants to operating charities over time. Julie Sunwoo, president of DAFgiving360, framed the moment as a planning opportunity, saying, “This is an opportunity going forward, to make sure that you meet that floor, that you’re bunching gifts appropriately so that you can take advantage of that deduction,” while also pointing to flexibility for local and rapid-response giving. 

On the corporate side, EY leaders described renewed pressure to rethink donation structures and classification, with strategies ranging from consolidating multi-year gifts into a single-year contribution to exploring when inventory rules, accrual timing, or IRC Sec. 162 business-expense treatment may apply, especially when sponsorships include clear marketing value.