Among its many changes, the tax law enacted in early July revises key rules governing charitable deductions. Most notably for high-income individuals, beginning January 1, 2026, the One Big Beautiful Bill Act (OBBBA):

• Sets a new charitable deduction floor. The OBBBA imposes a 0.5% adjusted gross income (AGI) floor for charitable contributions. Only the portion of contributions above 0.5% of a taxpayer’s AGI qualifies for a deduction.
• Limits the tax benefit of itemized deductions, including charitable donations. For taxpayers in the top 37% U.S. income tax bracket, the OBBBA applies a roughly 5.4% reduction to the lesser of (a) total itemized deductions, OR (b) the amount taxable income exceeds the starting point of the 37% rate bracket.¹

Importantly, these rule changes create a window of opportunity for taxpayers in 2025: Charitable donations made this year can still receive more favorable tax treatment than they will in future years – provided the taxpayer itemizes their deductions. (Tax treatments at the state level vary by jurisdiction.²) As an example, consider the tax savings a donor with an annual AGI of $1 million would achieve by donating $100,000 this year versus waiting until 2026:

Make your donations more rewarding and effective

Below are four helpful practices to keep in mind for successful and purposeful giving. Taking these steps before year-end can be especially helpful if you are likely to donate more in 2025 than you had initially anticipated.

1. Set clear objectives and goals

Be clear about your motivations and values:

• Why do you want to give? Are you driven by personal experience? A desire to give back? Will your giving involve family members? Or are you passionate about creating a legacy?
• What causes matter most to you? Do you have a desire to support innovative ideas, honor your faith or promote opportunity within your community?
• How will you define success? Do you want to tackle immediate issues? Help seek long-term solutions? Or do your goals include both immediate and long-term objectives?

To get started: Imagine the most significant achievement of your philanthropy five or 10 years from now. Clearly defining your objectives can help you focus and enhance your charitable efforts.

2. Know when to give

Timing can be important, particularly if you want your donation to complement your tax planning. Taking these steps can help:

• Align charitable contributions with key milestones or life events, such as major transactions, retirement or even your passing – but, as noted above, pay close attention to the new limitations on tax benefits for charitable giving, and consider that these may be higher in high-income years.
• Decide on the amount and duration of your giving: Carefully evaluate the amount of funding needed to achieve your philanthropic goals and the time period during which you will provide support. Is it just for the current year or a predetermined number of years? Does your commitment extend to supporting future generations as well?

3. Establish a governance framework

Create an oversight structure that aligns with your charitable vision and addresses two key questions:

• Will others be involved in your giving?
• And if so, how will decisions be made?

Answering these questions will help you determine who will participate in the philanthropic structure you create, the expectations for their ongoing engagement and the process(es) that will be used to reach agreement on key giving decisions.

Involving others can enrich and sustain your mission, and help to foster unity and a sense of shared purpose. Take the time to:

• Consider the impact of involving others in your philanthropy and whether you prefer family-driven initiatives or more autonomy.
• Identify decision makers and set clear expectations for their participation to avoid conflicts. Develop selection criteria, such as their education, time commitment and area of expertise. Fill knowledge gaps with experts, and assess participants’ interest and availability through open discussions.
• Establish clear decision-making procedures. Depending on your philanthropic goals, adopting a combination of commonly used voting practices (unilateral, majority and unanimous) may be most effective. For instance, you might use majority voting for annual funding decisions but require unanimity for larger grants. A hybrid approach can ensure inclusivity while maintaining control over significant decisions.
• Have clear funding guidelines to aid decision making. Define the issues and organizations you wish to support, the amounts you will donate and the duration of your giving. Specify any areas or organizations you won’t support to prevent future conflicts.

4. Implement your plans

To launch your giving strategy, identify organizations you admire, and communicate your intentions. Online research and networking can help you identify those that align with your interests and that also have strong track records, commitments to transparency and clear missions.

Once you have this information, you can consider speaking directly with the entities that most interest you to discuss how your donations might be used and their anticipated impact. Also consider the organization’s size, reach and specific programs, as well as how they measure success and outcomes. The more you know about an organization, the better you will be able to determine if its goals are in alignment with your own.

Similarly, be clear about any preferences you have regarding:

• Use of your donation: Do you want your contribution to support specific projects, fund general operations or enhance capacity building?
• Expectations for communications and reporting: Do you want to receive updates and progress reports? Attend board or committee meetings?
• Be open about your desire for transparency and accountability: Will the organization communicate insights into its successes and challenges?
• Consider formalizing your intentions through written agreements or grant letters, especially for significant or ongoing contributions. Clearly outline the terms of your support, including any conditions or expectations, to help ensure mutual understanding. Building strong partnerships with organizations can enhance the impact of your giving strategy.

We can help

Given the recent legislative changes, now may be a good time to revise – or accelerate – your charitable giving plans to try to optimize the impact of your charitable efforts, and to also maximize tax benefits this year. Your J.P. Morgan team, in close consultation with specialists in our Philanthropy Centre and your tax advisors, is ready to help you move forward.