For more than 100 years, the charitable deduction has encouraged individuals to make significant, transformational gifts to educational institutions. However, a study by Indiana University Lilly Family School of Philanthropy found that the percentage of American households that give to charity had fallen from two-thirds in 2000 to just 46.9 percent in 2020. Following the enactment of the Tax Cuts and Jobs Act of 2017, approximately 90 percent of Americans, particularly middle- and low-income taxpayers, were not incentivized to give more because they do not itemize their tax returns and therefore couldn’t deduct their charitable donations.

That changed in 2026 with the enactment of the non-itemizer charitable deduction. This provision builds off a temporary non-itemizer deduction Congress enacted during the pandemic. That non-itemizer deduction expired at the end of 2021, but during the time it was available, giving trends saw a positive uptick, with both the number of donors and gifts, especially small gifts, increasing in 2020 and 2021. 

Initial research projects the new non-itemizer deduction will do the same, with the Indiana University Lily Family School of Philanthropy projecting that it will lead to a $4.39 billion annual increase in charitable giving and prompt an additional 6 million to 8.7 million households to give. 

Enactment of this new non-itemizer deduction marks the culmination of years of advocacy by CASE and other groups for the Charitable Act (S. 317/H.R. 801 – 119th Congress), bipartisan legislation that would have restored the non-itemizer charitable deduction and expanded it to one-third of the standard deduction (around $5,000 for individuals, $10,000 for joint filers). 

The near-term impact of this new provision will depend on how effectively schools, colleges, and universities promote it. A survey from February 2026 found that roughly three-quarters of donors were unaware of the new incentive, highlighting the need for organizations to promote this new incentive. 

Case’s toolkits can help with that promotion! They include sample newsletter articles, emails to parents and alumni, social media posts, and more to get the word out and maximize the resources this new provision drives to educational institutions. 

The One Big Beautiful Bill Act also imposed new limitations on the itemized charitable deduction effective in 2026:

• A 0.5% of Adjusted Gross Income (AGI) floor on itemized charitable donations
• A 35% cap on the value of all itemized deductions, including the charitable deduction, for taxpayers in the 37% tax bracket
• For corporations, a 1% floor on corporate charitable contributions

These new provisions are expected to lead to declines in charitable giving. The Indiana University Lily Family School of Philanthropy projects these provisions will reduce charitable giving by approximately $10 billion each year. 

In addition to reducing the tax benefits of donors' generosity, the provisions also increase the complexity of charitable giving. This added complexity could prompt donors to look to fundraisers for information and clarity on the new tax changes. 

For more information on these provisions, CASE has produced a Frequently Asked Questions document that details each and provides insights on how donors may adjust their giving strategies in light of these new limitations. 

Charitable donations help colleges, universities, and independent schools achieve their teaching, research, and public service missions. As federal and state governments continue to cut funding for higher education, raising private support from individuals has become even more crucial for colleges and universities. Similarly, private support continues to be critical to funding key priorities at independent schools. 

The new non-itemizer charitable deduction should help educational institutions secure additional resources and develop new donors, particularly those who give to the institution’s annual fund. Developing a new generation of givers, which this non-itemizer deduction should help foster, will be crucial to the long-term financial stability of education.

However, the new limitations on charitable giving that took effect in 2026 could lead to declines in giving to educational institutions, specifically among wealthier donors who itemize their returns. CASE is constantly monitoring giving trends and data and will continue informing lawmakers of the impact of both the non-itemizer charitable deduction and itemized giving limitations.