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Tax Law Changes – Time to study up?

Spark Notes will be featured as a blog post each month, providing information relevant to current donors and fundholders and to those who may want to give to the Community Foundation.

The One Big Beautiful Bill Act was signed into law by President Trump on July 4, 2025, after the House of Representatives approved the Senate’s changes to H.R. 1, which passed the House by a narrow margin in May.

The OBBBA, with nearly 900 pages of provisions, reshapes policy across major sectors of the U.S. economy. Included in the OBBBA are several provisions that impact philanthropy. Three major takeaways are of particular importance as the community foundation helps donors, fund holders, and nonprofits–as well as attorneys, CPAs, and financial advisors–navigate charitable planning opportunities over the months and years ahead.

(Notably, the OBBBA omits several provisions that appeared in previous versions of the legislation, such as a proposed increase to the net investment income tax on private foundations.)

Insight #1: Standard deduction goes higher

What’s in the OBBBA?

The new law makes permanent the standard deduction increases under the Tax Cuts and Jobs Act of 2017 (TCJA), increasing the standard deduction for 2025 to $15,750 for single filers and $31,500 to taxpayers who are married and filing jointly. The new law also expands the “bonus” deduction for taxpayers 65 and older through 2028.

What’s more, under the new law, individuals who itemize may take charitable deductions only to the extent the charitable deductions exceed 0.5% of adjusted gross income. Furthermore, taxpayers in the top bracket can only claim a 35 percent tax deduction for charitable gifts instead of the full 37 percent that would otherwise apply to their income tax rate. Note also that the final bill extended the 60% of adjusted gross income contribution limitation for cash gifts made to certain qualifying charities.

What does this mean for charitable giving?

With even fewer taxpayers eligible to itemize, and deductions capped for high-income earners, we’re likely to see a continuation of the chilling effect on charitable giving that occurred in the wake of the TCJA.

What can you do?

If you regularly support charities, it’s important to continue to do so whether or not you’re benefiting from a tax deduction. Our community needs you, now more than ever. If you’re a nonprofit, or if you’re an attorney, CPA, or financial advisor who works with charitable clients, remember that people do not give to charity solely to secure a tax deduction. Keep in mind that many other factors motivate charitable giving, and philanthropy is an important priority for many families. (This article in the Stanford Social Innovation Review has stood the test of time.)

Insight #2: Deduction for non-itemizers

What’s in the OBBBA?

The new law includes a provision, effective after 2025, allowing non-itemizers to take a charitable deduction of $1,000 for single filers and $2,000 for taxpayers who are married and filing jointly. As has been the case in the past, gifts to donor-advised funds are not eligible. Unlike a previous (but smaller) similar provision, though, this law is not set to sunset.

What does this mean for charitable giving?

After the TCJA went into effect, households that itemize deductions dropped to under 10%. Parallel to this trend, the number of U.S. adults who give to charity in any given year has dropped over the last 20 years from nearly two-thirds to less than half, according to some studies. Against this backdrop, the OBBBA’s deduction for non-itemizers has the potential to re-motivate charitable giving among a significant number of households.

What can you do?

For everyone, now is the time to take a serious look at your charitable giving plans to support the causes you care about over the years ahead, especially if you are early in your career and not yet itemizing deductions. If you’ve already established a fund or you’re working with the Community Foundation in another way, please reach out to learn how we can help you make the most of the new tax laws, and even get your children and grandchildren involved. If you’re a nonprofit, now is the time to attract and engage brand new donors. And if you’re an attorney, CPA, or financial advisor, make sure you talk about charitable giving with your clients who don’t itemize; a $1000 or $2000 deduction could be just the motivation they need to begin a journey of philanthropy.

Insight#3: No sunsetting estate tax exemption

What’s in the OBBBA?

For affluent taxpayers updating financial and estate plans, and for the attorneys, CPAs, and wealth managers advising them, the last couple of years have been a roller coaster because of the looming possibility that the TCJA’s increase to the estate tax exemption would sunset at the end of 2025. Finally, there is clarity: Under the OBBBA, the sunset will not happen. The new law makes permanent the increase in the unified credit and generation-skipping transfer tax exemption threshold. The 2025 exemption is $13.99 million for single filers and $27.98 million married filing jointly. In 2026, these numbers increase to $15 million and $30 million respectively.

What does this mean for charitable giving?

Purely estate tax-based incentives to give to charity continue to apply only to the ultra-wealthy, likely resulting in a continuation of the taxpayer behavior triggered by the TCJA. In other words, most people will give to charity during their lifetimes and in their estates for reasons other than a tax deduction.

What can you do?

There is no guarantee that the estate tax exemption will stay high forever. As families work with their tax and estate planning advisors, many are viewing the next two years as an important window to plan ahead. The upshot of the new law is that high net-worth taxpayers now have more time to thoughtfully consider estate planning strategies, including charitable giving. For nonprofit organizations, this means continuing to focus on long-term planned giving strategies is wise.  

The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

On February 26th, Berks County Community Foundation held a reception at Vintner’s Table in Wyomissing, attended by over thirty-five professional advisors. The event was an opportunity for us to thank the professional advisors who, by introducing the Community Foundation to their clients, allow us to continue our mission of promoting philanthropy and improving the quality of life for Berks County residents.      

Other staff members present included Kevin K. Murphy, President; Monica Reyes, VP for Programs & Initiatives; Molly McCullough Robbins, VP for Philanthropic Services; Erica Caceres, Communication Manager; Vivi Anthony, Executive Assistant, and our team of program officers. 

Cindy Milian, Health and Human Services Program Officer, oversees grants for individuals, public health initiatives, human services initiatives, and animal welfare.   

Emily Smedley, Environment and Energy Program Officer, manages programs and grants related to the environment, sustainable energy, land use, and neighborhood vitality.   

Kim Sheffer, Lifelong Learning Program Officer, manages the scholarship and educational grant funds.   

We enjoyed the chance to mingle with our professional advisor friends and provide updates on Community Foundation work in the community. 

Since the Community Foundation was founded over 30 years ago, 50% of the charitable funds we manage have been the direct result of a referral by a professional advisor. In dollar amounts, 76% of our current investment pool is the result of funds referred to us by a professional advisor.  

Details on how you can be a referrer and spark change are available in the Community Foundation’s Giving Guide.   

If you have questions, please email me at frankia@bccf.org. 

In Fiscal Year 2024, Berks County Community Foundation distributed $5.4 million in grants and scholarships to support the community. The year was filled with innovative projects, impactful programs and a strong commitment to our mission.  

Berks County Community Foundation helps donors fulfill their charitable desires. The Foundation was established in 1994 as a non-profit, public charity to provide a locally managed resource for establishing endowments. We have program officers on staff who are experts in their focus areas – energy & environment, lifelong learning, health & human services, the arts, and neighborhood & economic development. They steward these charitable funds to ensure that the grants and scholarships awarded from them are making an impact and fulfilling our donors’ wishes.  

“The work we do isn’t only about working with donors to establish funds. Nor is it just about awarding grants and scholarships. The team at the Community Foundation convenes local leaders, research national and local trends, and chooses initiatives on which to focus so community conversations get moving and big ideas are discussed”, Kevin Murphy, president says.  

The Annual Report highlights our mission of promoting philanthropy and improving the quality of life for the residents of Berks County. The team works hard to bring organizations and individuals together for collaboration to spark change in the community. This year’s Annual Report provides detailed stories and data behind these achievements, underscoring the powerful impact of donor support in the community.  

To read the full report, take a look below.  

On February 28th, Berks County Community Foundation held a Winter Get Together. Over 30 professional advisors attended the event, which included a roll-out of our updated Giving Guide.  

The Giving Guide is a comprehensive resource designed to explain what a community foundation is and the advantages of using Berks County Community Foundation. The guide includes explanations on the various types of funds one can establish, how to create a charitable fund, and more.   

Introductions to the program officers and their areas of focus were part of the evening’s festivities, in addition to introducing a new face, Molly McCullough Robbins.  

Robbins comes to the foundation as the Vice President for Philanthropic Services handling resource development and promotional efforts of the foundation. Robbins will work with the program officers to identify individuals in the community who may be interested in supporting the foundation’s work.  

The event was also a chance for us to thank the professional advisors who, by introducing the Community Foundation to their clients, allowed us to carry on our mission of promoting philanthropy and improving the quality of life for Berks County residents.    

Since the Community Foundation was founded 30 years ago this year, 50% of the charitable funds we manage have been the direct result of a referral by a professional advisor. If we look at the dollar amount of those funds referred to by a professional advisor, it is 76% of our current investment pool. 

Details on how you can be a referral and spark change are available in the Community Foundation’s Giving Guide.  

If you have questions, please email give@bccf.org.

For nearly 30 years, Berks County Community Foundation has helped individuals, families, organizations, and businesses achieve their charitable objectives. We know that change radiates outward, and we help people create a brighter future and a legacy of real transformation for all of us. This often includes creating a fund to honor the memory of a loved one or support a cause about which the individual or family cares deeply. In either case, a member of our staff works with the people involved to determine the best way to meet their charitable objectives.

How does it work?  First, think about what you are passionate about supporting.  We can help you achieve your charitable goals, no matter the cause or motivation. Let us help you discover the type of charitable fund that best matches your goals.

Different funds fulfill different dreams.

Which of these types of funds works best for your dream? 

Ready to put your charitable vision into action?  We are here to help. Click here to use our short questionnaire to set your journey of generosity in motion. Questions? Email give@bccf.org. – We look forward to helping you fulfill your charitable goals.

Every year, Rutter’s organizes a Secret Santa event where they select 100 employees throughout the company to decide where to donate $1,000. This holiday season, Matthew Commons was one of the lucky individuals to donate to a charity of his choice. 

Matthew decided the donation should go to a fund at Berks County Community Foundation. “What better way to give back to my community than choosing the foundation that goes above and beyond to support every aspect of the place I grew up in?” 

The impact of Matthew’s choice reaches far beyond the monetary value of the donation. 

Matthew decided the donation should go to a charitable fund that supports local businesses. The donation will be put into the Business Jump Start Incubator Fund. This fund supports startup businesses. Startup businesses pay a reduced rent and in return get a fully furnished office, Wi-Fi, and use of the conference facilities. By supporting local businesses, Matt is contributing to the economic impact of the community.  

Matt’s story serves as an inspiration for us all. It reminds us that change starts with a spark. Your spark. And every act of generosity, when directed with purpose, can have a profound impact on the lives of those around us. 

Want to make a positive difference in Berks County? We’re happy to answer your questions, discuss charitable options with you, and do everything we can to ensure your charitable objectives are fulfilled. We’d love to chat. Contact us today. 

Matthew Commons delivers a surprise donation to help support local businesses in the community.

Matthew Commons delivers a surprise donation to help support local businesses in the community.

For nearly three decades, I’ve had the joy of meeting with individuals and families as they write their wills – usually with the help of their lawyer – and listening to them describe the people who are or have been important to them in life. Of course their parents, siblings, or children are often mentioned, sometimes a beloved teacher or coach.

Taking the time to create a will can feel daunting, but one way to make the task more interesting is to consider whether – and how – you’d like to give back to your community after you’re gone. That’s where we come in. Berks County Community Foundation offers a unique and powerful way for individuals to make a lasting impact in their community by creating a charitable fund through their will.

Creating a fund through a will is an easy and meaningful way for you to support causes and organizations that align with your values and passions. This can be done by including a provision in the will that directs a specific asset or portion of the estate to the Community Foundation, which will be used to establish a named fund in your memory or in honor of a loved one.

The process of creating a fund through a will is relatively simple. You can work with your attorney to include language in your will that directs assets to the Community Foundation. You can also consult with our staff to determine the most appropriate type of fund for your charitable interests and goals. Once the will is executed, we’ll work with your executor or personal representative to establish the fund according to the instructions provided in the will.

The benefits of creating a fund through a will at the Community Foundation are numerous. Not only does it provide a way for you to make a lasting impact in your community, but it also offers a range of giving options, such as unrestricted funds, field of interest funds, and designated funds. This allows you to support a specific cause or organization, or to give the Community Foundation the flexibility to respond to the changing needs of the community over time.

In addition to the charitable benefits, creating a fund through a will also provides a number of personal benefits. It can help to ensure your assets are distributed according to your wishes, and it can provide a way for you to leave a lasting legacy in memory of a loved one. It can also be a way for you to make a difference in the lives of others, even after you are gone.

Overall, creating a fund through a will at the Community Foundation is a powerful way to make a lasting impact in your community. It’s easy to set up and provides a range of giving options, allowing you to support the causes and organizations that are important to you while also leaving a lasting legacy.

Berks County Community Foundation is committed to responsible stewardship of the charitable assets entrusted to us by our donors. One of the ways we do this is through our 4.5 percent spending policy for endowed funds.

Endowed funds are a type of charitable fund that are established with a minimum donation of $50,000. The principal of the fund is invested, with a portion of the investment earnings distributed each year to support charitable causes and organizations in accordance with the fund agreement. The spending policy for an endowed fund is the percentage of the fund’s average value over a rolling three-year period that is distributed for charitable purposes each year.

We have adopted a spending policy of 4.5 percent for endowed funds. This means that, on average, 4.5 percent of the value of an endowed fund is distributed each year for charitable purposes. This spending policy is a balance between preserving the purchasing power of the fund over time and providing a steady stream of support for charitable causes and organizations.

The spending policy is reviewed regularly by our board of directors, and any adjustments to the spending policy are made with the goal of balancing the long-term preservation of the fund’s principal with the need to provide support for charitable causes and organizations.

One of the benefits of this policy is that it allows people to know that when they establish an endowed fund with us, their donations will continue to support the causes and organizations they care about for generations to come.

In addition, this policy also allows the fund to grow over time and allows more money to be distributed over time, meaning more impact can be made in the community over time.

Overall, our 4.5 percent spending policy for endowed funds is an important part of our commitment to responsible stewardship of charitable assets. It’s designed to balance the long-term preservation of the fund’s principal with the need to provide support for charitable causes and organizations, and to ensure that our donors’ gifts continue to make an impact for generations to come.

Berks County Community Foundation is committed to maximizing the long-term growth of our endowed funds in order to support charitable causes and organizations in the community. To achieve this goal, we’ve developed an investment philosophy that emphasizes diversification, long-term growth, and low costs.

Our investment philosophy is based on the belief that diversification is key to achieving long-term growth and managing risk. We invest in a mix of stocks, bonds, and real assets, such as real estate and natural resources, to spread risk and capture growth opportunities across different asset classes.

We also believe in a long-term investment approach. We understand that investments can be volatile in the short-term, but over the long-term, the stock market has historically provided strong returns. Therefore, our investment strategy is designed to capture these long-term returns and provide a steady stream of support for charitable causes and organizations.

In addition, we are committed to keeping costs low. We understand that high costs can eat into returns over time, and we strive to minimize expenses to maximize returns for our donors and the causes they support.

To help us achieve our investment goals, we use Fund Evaluation Group (FEG) as our investment consultant. FEG is an independent investment consulting firm that provides investment advice, research, and due diligence services to a wide range of nonprofit organizations and foundations.

FEG helps us to monitor and evaluate the performance of our investments, and they provide us with regular reports and recommendations to ensure that our portfolio is aligned with our investment philosophy and objectives. They also assist us with researching and selecting new investments, as well as monitoring and assessing the performance of our current investments.

Our investment philosophy is based on the belief that diversification, long-term growth, and low costs are key to maximizing the stability of our endowed funds in order to support charitable causes and organizations in the community. By using Fund Evaluation Group as our investment consultant, we can achieve our investment objectives and ensure that our donors’ gifts continue to make a positive impact for generations to come.

As the season of giving approaches, people often open their hearts and their wallets for good causes. In some cases, donations to those causes may be deducted from your taxes, but not always. If you’re hoping to support a cause and take advantage of a tax deduction, be sure to check with your accountant or attorney before you write that check or click “give.”

“There are many caring things that people do that are not considered charitable in the eyes of the Internal Revenue Service,” said Frances A. Aitken, CPA, chief operating officer at Berks County Community Foundation. “That doesn’t necessarily mean you shouldn’t give, but it’s good to be aware of the types of donations that do not qualify for a deduction.”

In general, donations to the following types of organizations qualify for the charitable tax deduction:

In general, donations to the following types of causes DO NOT qualify for a tax deduction:

This list is not exhaustive, and regulations change often, so be sure to seek the advice of a qualified financial professional if you are unsure if your donation is tax-deductible. “At the Community Foundation, we manage funds created by local people to provide grants for causes they care about,” Aitken said. “We’re governed by IRS rules too, so we always check the charitable status of an organization before we issue a grant. If you’re interested in the charitable deduction and you aren’t sure if the organization you’re giving to is charitable, call your accountant.”

To make a tax-deductible gift to a charitable fund managed by the Community Foundation, visit www.bccf.org and click “Give Now.” With more than 370 charitable funds under management, you’re sure to find one that provides grants or scholarships for a cause you care about. To learn more about creating a charitable fund of your own, call the Community Foundation at 610-685.2223.