Things every donor should know for year-end giving
You are an essential part of bringing hope to our neighborhood families. Through your generosity and continuous support, Shepherd Community is able to connect and build authentic relationships with 10,000 unique individuals every year as we work to further our mission to break the cycle of poverty on the near Eastside of Indianapolis and meet the physical, emotional, spiritual, and academic needs of our neighbors from cradle to career – and beyond.
As another year ends and you plan your charitable giving, we want to highlight how recent tax changes can amplify the impact of your generous giving to Shepherd while also saving you on taxes.
The law changes through the One Big Beautiful Bill bring opportunities for your gift to make an even greater impact on your community and your pocketbook. From strategic planning to IRA Qualified Charitable Distribution (QCD) to non-cash giving to monthly or annual giving, no matter how you want to give, we want to help make that gift – small or large – work for you.
Here are just some key charitable giving changes that every donor should know:
NEW Universal Charitable Deduction
If you take the standard deduction on your taxes (non-itemizer), the new tax changes provide you with this Universal Charitable Deduction as a permanent benefit and raise the standard deduction limits to $1,000 (single) and $2,000 (joint filers).
NEW 0.5% AGI Floor
If you itemize your returns, there is a new 0.5% Adjusted Gross Income (AGI) floor that will require you to contribute above this amount before being able to claim a deduction.
For individuals wanting to itemize but giving below the 0.5% AGI, you may want to consider a strategy where you combine multiple years’ worth of charitable giving in a single year, called “bunching.”
NEW 35% Cap on Itemized Deduction Value
For those in the 37% tax bracket who itemize deductions, the cap on the value of your giving will now be reduced to 35%. As a higher wealth donor, this 2% shift could be significant. You can offset that 2% shift by leveraging strategies that provide tax benefits beyond charitable deductions.
EXTENDED 60% AGI Limit for Cash Gifts
Another change in the new tax law is the permanent extension of the 60% AGI limit on cash contributions to qualified charities, allowing itemizing donors to deduct more of their income through charitable giving, year after year. Previously set to expire, this higher limit is beneficial for those making large one-time gifts or planning multi-year philanthropic strategies. Additionally, you can combine this with the 30% AGI limit for gifts of appreciated assets, offering a powerful way to maximize both impact and tax savings.
NEW 1% Floor for Corporate Partners
Starting in 2026, corporations will only be able to deduct charitable contributions that exceed 1% of their taxable income. The existing 10% AGI cap on corporate charitable deductions remains in place, but now there is a floor as well as a ceiling. Any disallowed deductions cannot be carried forward unless the total giving exceeds the 10% cap. This could be especially impactful for smaller businesses whose giving often falls below the 1% threshold. For these companies, “bunching” donations may become a key strategy to qualify for a deduction.
If you have any questions or want to talk through some strategic giving options, connect with me or any of our Shepherd Development team members. And, as always, please consult your tax or financial professional with specific questions about what is best for your finances.
Learn more about giving a Legacy of Hope at ShepherdCommunity.org/LegacyOfHope or the many ways you can give non-cash options (IRAs, Stocks, Bonds, Estates, Vehicles, Homes, etc) at ShepherdCommunity.org/give/non-cash-donations
