A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
New tax laws risk reducing charitable giving by the wealthy next year, economists and academic experts say, leaving less-wealthy Americans to make up the difference.
Under President Donald Trump’s “big beautiful bill,” signed into law in July, several tax benefits for wealthy donors will be reduced. Top earners will also have their effective tax benefit cut from 37% to 35%. The Indiana University Lilly Family School of Philanthropy estimates this cap alone will reduce giving by $4.1 billion to approximately $6.1 billion annually.
In addition, the bill also limits tax incentives for itemizers, who will only be able to deduct donations in excess of 0.5% of their adjusted gross income.
At the same time, the bill also creates new incentives for middle- and lower-income filers to give. Starting next year, roughly 140 million taxpayers who do not itemize will still be able to deduct up to $1,000 in cash donations per filer. About 90% of taxpayers take the standard deduction since it was raised in 2017 during the first Trump administration.
