Rich mega-donors like MacKenzie Scott have been pumping hundreds of millions of dollars into philanthropic causes—but Trump’s new tax policies could put billionaire charity in jeopardy. And America’s middle class won’t be able to pick up the pieces.
President Donald Trump’s “One Big Beautiful Bill,” signed into law this July, will limit tax benefits for wealthy donors starting in 2026. The new ceiling will cut the effective tax benefit from 37% to 35%. The legislation also suppresses tax breaks for itemizers: They’ll be able to deduct donations only in excess of 0.5% of their adjusted gross income.
Now, philanthropic organizations and research institutions are waving the warning sign: It’s estimated that the 35% limit will reduce donations by at least $4.1 billion, and as much as $6.1 billion, according to the Indiana University Lilly Family School of Philanthropy. It’s a massive blow to charitable causes, as just a handful of billionaires give at proportions that middle-class voters won’t be able to match. Under this new bill, around 140 million average taxpayers who don’t itemize will still be able to deduct up to $1,000 in cash donations; around 90% have taken the standard deduction since it was raised during Trump’s first administration, in 2017.
