By Dan Flynn – Director, Development & External Relations
Community Foundation of Howard County
Tax season is here – and this year, philanthropic planning deserves a closer look.
Several important federal tax law changes take effect on January 1, 2026, and they may influence how – and when – you structure your giving. Whether you already have a fund at the Community Foundation of Howard County or are considering establishing one, now is the time to revisit your strategy.
These updates are also the reason we’re hosting our upcoming givingLab Lunch & Learn on March 18: “What Type of Fund Is Right for You?” We’ll explore how different types of charitable funds can help you navigate the new rules while aligning your philanthropy with your financial and estate plans.
Before that conversation, here are four key reminders to review with your CPA or advisor.
1. Itemizing Charitable Deductions Will Look Different
Beginning in 2026, charitable deductions for taxpayers who itemize will be allowed only to the extent they exceed 0.5% of adjusted gross income (AGI). In practical terms, this creates a deductible-like threshold.
If your AGI is $200,000, for example, the first $1,000 of charitable contributions will not be deductible. Only amounts above that level qualify, subject to existing percentage-of-income limits.
For some donors, this change may make it more attractive to “bundle” or “bunch” contributions into a single year – potentially through a donor-advised fund at CFHC — so that total giving exceeds both the standard deduction and the new AGI floor while allowing grants to be distributed over time.
Additionally, the value of itemized charitable deductions will be capped at a 35% rate. While charitable giving is rarely motivated solely by tax considerations, this adjustment may influence the timing, structure, or asset selection for larger gifts.
On a positive note, the long-standing rule allowing cash gifts to qualified public charities – including funds at CFHC – to be deducted up to 60% of AGI has been made permanent (after clearing the new AGI floor). Gifts of appreciated assets such as stock or real estate generally remain deductible up to 30% of AGI.
2. A New Opportunity for Non-Itemizers
Beginning in 2026, even taxpayers who do not itemize may claim an above-the-line charitable deduction of up to:
- $1,000 for single filers
- $2,000 for married couples filing jointly
This applies to cash gifts made directly to qualifying nonprofits.
While this deduction does not apply to non-cash gifts or donor-advised funds, it creates meaningful opportunities for households who previously saw no tax benefit from their annual giving. It may also be a useful strategy for younger donors – including adult children beginning to build their own philanthropic habits.
3. Documentation Still Matters
The documentation rules remain in place. Gifts over $250 require written acknowledgment from the nonprofit. Non-cash gifts valued at $500 or more require IRS Form 8283, and donations over $5,000 require a qualified appraisal.
One advantage of organizing your giving through a donor-advised fund at the Community Foundation is simplified recordkeeping. You receive a single tax receipt for your annual contribution – regardless of how many grants are distributed to nonprofits throughout the year. Many donors and professional advisors find this consolidated approach especially helpful at tax time.
4. Qualified Charitable Distributions Remain Powerful
If you are age 70½ or older, Qualified Charitable Distributions (QCDs) from your IRA may be especially efficient under the new rules.
In 2026, up to $111,000 per taxpayer may be transferred directly from an IRA to certain types of charitable funds at CFHC or other public charities without including the distribution in taxable income. QCDs can also satisfy required minimum distributions where applicable.
Importantly, QCDs are not affected by the new itemized deduction floor or deduction caps. While QCDs cannot be directed to donor-advised funds, they can support designated, field-of-interest, scholarship, or unrestricted funds at the Community Foundation.
Join Us on March 18
Philanthropic planning in 2026 is more nuanced – but it also presents opportunity.
On March 18 from 12:00–12:45 pm via Zoom, I will host our next GivingLab Lunch & Learn: “What Type of Fund Is Right for You?”
We’ll explore:
- Donor-advised funds
- Designated funds
- Field-of-interest funds
- Unrestricted funds
- Scholarship funds
- And strategies for integrating charitable planning into your broader financial goals
Whether you are an established fundholder, considering opening a fund, or advising clients on giving strategies, this session will provide practical guidance and time for questions.
I hope you’ll join us.
Register here:
https://cfhoco.org/givinglab-lunch-learn-series/