A NEW ERA FOR GENEROSITY: WHAT THE BIG BEAUTIFUL BILL MEANS FOR CATHOLIC FAMILIES

by Dennis J. Gerber, Jr
President, Knights of Columbus Charitable Fund

July 2025

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law, creating a renewed opportunity for Americans to give generously, while receiving a tax benefit, even if they do not itemize deductions. For Catholic families and those who seek to align their faith with their finances, this is a moment to reflect on how we give, why we give, and how we can give well.

The Return of a Universal Charitable Deduction

For the first time in decades, taxpayers can now deduct up to $1,000 (individuals) or $2,000 (married couples) in charitable contributions while still taking the standard deduction. This change makes the spiritual and practical benefits of charitable giving more accessible to families across all income levels.

While this provision may feel new, it echoes a historical precedent. Between 1982 and 1986, non-itemizers were allowed to deduct charitable contributions, which significantly encouraged broad-based giving. That benefit was eliminated by the 1986 Tax Reform Act and remained absent for over 35 years, except for a brief return during the pandemic (2020–2021) with a temporary $300/$600 deduction. The BBB now revives and expands this opportunity, encouraging a wider culture of generosity.

A Higher Standard Deduction: An invitation to Plan Through “Bunching”

The BBB also increases the standard deduction, meaning many households will continue to take it. However, for those with larger charitable goals, this presents a strategic opportunity: bunching.

What is Bunching?

Bunching involves consolidating multiple years of charitable contributions into a single tax year. This allows donors to exceed the standard deduction threshold, itemize their deductions, and receive a greater tax benefit in that year. In subsequent years, they can return to the standard deduction while continuing to support their favorite charities using previously allocated funds.

Example:

A family that typically donates $10,000 annually may not exceed the standard deduction. But by giving $30,000 in one year (three years’ worth of donations), they can itemize and receive the full tax benefit that year, then take the standard deduction in the following years.

Using a Donor-Advised Fund with Bunching:

A Donor-Advised Fund, such as the Charitable Fund offered by KCCF, is a powerful tool for implementing a bunching strategy. By making a large, tax-deductible contribution to your DAF in a single year, you can:

Exceed the standard deduction and itemize;
Retain flexibility to distribute grants over time, and;
Invest the funds tax-free, potentially increasing your charitable impact

This approach allows you to capture the tax benefits of a large gift while maintaining your regular giving rhythm, supporting your parish, Catholic schools, or other apostolates year after year.

Before making a large charitable contribution, consult your tax professional or financial advisor to ensure this strategy aligns with your goals and family giving plans.

A hopeful Moment for Generosity

While some in the philanthropic world have expressed concern that the BBB might discourage giving, I see it as a call to action. Fundraisers, financial professionals, and philanthropic advisors now have an opportunity to educate and empower donors to take full advantage of this renewed incentive. History supports this optimism:

When a universal charitable deduction was available from 1982 to 1986, charitable giving increased by approximately 4.3%, according to the Lilly Family School of Philanthropy^[i]. Adjusted for today, this could translate into billions of additional dollars in charitable support. When the deduction ended, giving didn’t decline, but its growth slowed, suggesting that universal deductions accelerate generosity.

Before 2017, about 31% of taxpayers itemized and benefited from charitable deductions. After the standard deduction nearly doubled, that number dropped to 7.5%^[ii], meaning over 90% of donors received no tax benefit for their generosity. The BBB changes that, opening the door for more Americans to give and receive a deduction, regardless of whether they itemize.

Combined with accessible tools like donor-advised funds, families at any income level can begin building a charitable legacy. Even modest gifts, given intentionally, can grow and multiply over time.

Why This Matters for Catholic Families

The Church’s mission, to serve the poor, educate the young, and proclaim the Gospel—continues regardless of tax policy. But this moment reminds us that generosity is an act of hope, trusting that God can use our gifts, large or small, to transform lives and build a culture of life.

Whether you support your parish, Catholic education, pregnancy resource centers, or apostolates serving the vulnerable, your generosity makes a real difference. Tax benefits should never be the reason we give, but they can empower us to give more confidently and sustainably.

Tax laws change, but our call to generosity does not.

The Big Beautiful Bill is a new opportunity to align your financial plans with your faith commitments, ensuring that your giving is not only effective but also a reflection of your gratitude for the blessings God has entrusted to you.

This is a moment to talk with your family about generosity, reflect on how you can share your blessings with others, and consider how your giving can build the Church and support those in need in practical, impactful ways.

[i] Tax Policy and Charitable Giving Results

[ii] The Nonprofit Alliance - Universal Charitable Deduction

Knights of Columbus Charitable Fund (“KCCF”) is an independent, nonprofit, public charity with a donor-advised fund program. Various entities affiliated with Knights of Columbus provide certain investment management and administrative services to KCCF. Knights of Columbus Asset Advisors (“KoCAA”) serves as the investment manager of KCCF, and the assets are invested in investment funds managed by KoCAA. The value of an invested donation will fluctuate over time and may gain or lose money. For additional information visit knightscharitable.org.

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