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Today is Giving Tuesday, a critical time for anyone considering year-end tax planning. Charitable giving rules are set to change significantly in 2026, and many donors are trying to figure out the wisest move before the deadline. To learn more, we asked Nick Cherney, global head of innovation at Janice Henderson Investors. Nick, nice to meet you. Nick, new rules for charitable giving are coming soon. Maybe start here, Nick. What are these new rules? what people need
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Do you know? Yeah, I mean, obviously the tax rules can get very complicated, very quickly, but at a high level, the most important change is actually that for taxpayers who are used to claiming deductions, there’s a new change that limits the amount of deductions you can make for charitable donations. Um, so you can only deduct donations that exceed 1.5 or 1% of your adjusted gross income, uh, starting in 2026. So, uh, you know, for someone making $50,000 a year, that means the first $250 of their charitable giving is no longer deductible. You know, if you make $100,000 a year, this is the first $500. So I think there are some strategies that people can employ to try to think ahead and plan for these changes starting next year.
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Nick, what are these strategies? What would you emphasize?
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Yeah, I mean, I think the most obvious thing is probably to think about how to front load or centralize your giving. So there’s one strategy that has long been known to high-net-worth and ultra-high-net-worth investors, and that’s the idea of donor-advised funds. It makes the donation you make today 100% deductible, um, and then you can invest those funds and donate them over time. People have been doing this for a long time because it gets you a lot of benefits, right? One of them is obviously, well, getting your tax deduction now to donate in the future. And some practical stuff, right? Around making it a little easier to track your donations and more. Well, but. Particularly this year, I think that might be attractive even for low-end donors if they’re used to income tax deductions because the availability of those deductions is going to decrease. Then again, even for someone who makes $50,000 a year and might donate $250, that money won’t be deductible at all starting next year. If you were to donate $750 this year. Go into a donor advised fund and you can deduct the full amount, then donate $250 per year for the next 3 years and you’ve already gotten the deduction. So I think, uh, this bundling idea has been used by larger donors for a long time. And, uh, with these changes, I think it may be important for donors of all sizes to maximize the impact of their donations and get the deduction this year.
