Generosity is one of the few money decisions most people make without running the math first. You write the check because something moved you, and the arithmetic shows up later, if it shows up at all.
The ritual is familiar enough to be invisible. A donation goes out in December. A receipt comes back in January. The number lands on a tax return in April and then disappears into a filing cabinet until the next holiday season.
Nobody checks the second half of the trip. Where the money actually went after it left the account, who controlled it once it got there, and whether the group that cashed the check was the same group doing the work.
That is a lot of trust to extend to a form letter. Americans extended $617.20 billion in giving in 2025, the first year the total giving cleared $600 billion, according to Giving USA.
Washington has decided to start checking. Treasury Secretary Scott Bessent threw his weight behind a package of nonprofit disclosure bills last week, and the timing lands on the charitable deduction at the exact moment millions more filers are about to claim one.
Treasury is rewriting Form 990 while the House moves four disclosure bills.valiantsin suprunovich / Getty Images
Why the charitable deduction works differently for 2026 filers
The tax code treats your giving differently this year than it did last year, and most people have not noticed yet.
Starting with the 2026 tax year, filers who take the standard deduction can write off up to $1,000 in cash donations, or $2,000 for joint filers, a break that did not exist on last year’s return, according to Fidelity Charitable.
That is a big deal for the roughly 86% of filers the Tax Foundation expects to skip itemizing this year, as TheStreet has reported.
More Treasury:
The same law moved the goalposts in the other direction for people who do itemize. Charitable gifts are now deductible only to the extent they exceed 0.5% of adjusted gross income, so a couple earning $300,000 gets nothing on the first $1,500 they give, the firm confirmed.
Retirees have a workaround that sidesteps both limits, which TheStreet covered when Vanguard flagged the qualified charitable distribution as the 2026 move.
When I pulled the Giving USA breakdown, one number stood out. Individuals accounted for $394.20 billion of last year’s total, or 64 cents of every charitable dollar in the country.
That is not foundation money or corporate money. That is household money, given by people who will never see a Form 990 in their lives.
The receiving end has grown to a size most donors would not guess. Rep. David Schweikert put the tax-exempt share of the U.S. economy at roughly 17% during a June hearing with Bessent, according to the congressman’s office.
Put those two facts side by side, and the policy fight stops looking abstract. A sector that large, funded that heavily by ordinary households, has been reporting on itself through a form that has not kept pace with how money now moves through it.
The issue centers on a tax-code blind spot known as fiscal sponsorship. Under current rules, an established charity can let an unregistered group operate under its tax exemption. Donors get a tax deduction, the parent charity takes a fee, and the group doing the work never has to file a Form 990 or reveal its name to the IRS. To regulators, it creates a massive black hole for accountability.
What the Treasury nonprofit disclosure push actually does
Bessent made his position public on July 23, writing that “Public money and tax-exempt status demand public accountability,” in a post on X. He said Treasury is acting to keep nonprofit status from being used to conceal fraud, abuse and illegal extremist activity.
On July 22, the House Ways and Means Committee moved a slate of four transparency bills to address those exact gaps:
H.R. 9721, the Fiscal Sponsorship Transparency Act, would force charities to publicly disclose details about the projects operating under their tax-exempt umbrella, according to Independent Sector.
H.R. 9772, the Foreign Funding Transparency Act, would add two lines to the Form 990 covering money received from foreign nationals, per Independent Sector’s summary.
H.R. 9771, the Stopping Foreign Influence in Elections Act, would tax and eventually suspend the exempt status of groups routing foreign-linked money into political committees, the group reported.
H.R. 9722, the Fair Treatment of Religious Organizations Act, would bar the IRS from weighing a group’s beliefs about marriage or sexuality when it rules on religious purpose, the same summary said.
None of this started with the committee. Treasury announced in April that the IRS would revise the Form 990 to require clearer reporting on government grants, government contracts and fiscal sponsorship arrangements, according to a Treasury statement.
Bessent has described the standard in banking terms, telling lawmakers that foundation directors “must know your grantee,” according to Schweikert’s office. Trustees who miss violent or rights-stripping uses of their money put the exemption itself at risk, he said.
The committee’s own case study is worth knowing. A 501(c)(3) called Alliance for Global Justice fiscally sponsored Samidoun without ever naming it on a Form 990, and Treasury later designated Samidoun as a fundraiser for a foreign terrorist organization, according to the Ways and Means Committee.
The sector is not applauding. Every one of the four bills advanced on a party-line vote and nine Democratic amendments failed, according to Independent Sector policy director Ben Kershaw, who argued the fiscal sponsorship definition was written too fast to work properly.
How to check a charity before your next donation clears
My analysis of the committee record suggests these bills face long odds in the Senate this year, where 60 votes is the practical threshold. The Form 990 rewrite at Treasury does not need Congress at all.
That split is the part worth holding onto. The legislation may stall, and the disclosure forms will change anyway, which means the information reaching donors is about to improve regardless of what happens on the floor.
I have read enough Form 990s to say the current version tells you plenty about a charity’s payroll and almost nothing about its partners. That gap is precisely what both tracks are aimed at.
Three habits will put you ahead of that curve.
Verify exempt status before you give, not after, using the IRS Tax Exempt Organization Search tool. A group soliciting under someone else’s umbrella will not appear there under its own name.
Ask fiscal sponsors who runs the project. Under current rules, sponsored groups file nothing of their own, so the question has to come from you.
Keep the paperwork. The 2026 write-off for standard-deduction filers still requires a record showing the date, the amount and the recipient, per Fidelity Charitable guidance.
Charitable giving is heading into its most closely watched stretch in decades, and the donors who benefit will be the ones who treated a receipt as the start of the question rather than the end of it.
