In our conversations with clients, charitable giving almost always starts with values, not tax rules. Clients typically want to support causes they care about, and the tax benefits are often secondary. That said, how gifts are structured can make a real difference in how much lifetime giving actually reaches the charity versus getting eaten up by taxes along the way.

Changes to the tax code have made this even more relevant than it’s been in the past. For 2026, the standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, with additional deductions for seniors. That’s a high bar to clear, and it means a lot of taxpayers who give modest amounts to charity each year aren’t getting any tax benefit at all, because their total itemized deductions (including charitable gifts) never exceed the applicable standard deduction.

There are also two new considerations for 2026 that impact charitable deductions. If you itemize deductions, the first 0.5% of your Adjusted Gross Income (AGI) given to charity is no longer deductible currently. For example, if your AGI is $300,000, the first $1,500 of what you give does not count toward your deduction, only the amount above that is deductible.

However, those taking the standard deduction can now deduct up to $1,000 (or $2,000 if married filing jointly) in cash gifts, above the applicable standard deduction. Therefore, depending on your situation, the best way to give in 2026 may be different from what it used to be, and it’s worth revisiting even if you haven’t changed your giving habits.

For itemized charitable deductions, you should also consider the different ceilings for how much you are able to deduct in any given year, which are percentages of your AGI. These percentages vary based on what type of property you are giving and to whom, ranging from 20% to 60% of your AGI. Disallowed deductions over these thresholds can be carried forward for up to 5 years.

A Few Strategies Worth Knowing

Bunching: If your annual giving doesn’t get you past the standard deduction, one option is to bunch several years of giving into a single year. For example, rather than giving $10,000 a year, you might give $30,000 once, then scale back for the next couple of years. In that bunched year, itemizing could produce a tax deduction that smaller gifts over time never would have. We usually suggest clients think about which years make the most sense to bunch into. A year with a bonus, a big capital gain, or a Roth conversion is often a good candidate, since you’re already going to have a larger tax bill to offset, and a bigger charitable deduction may reduce your tax bill and potentially your marginal tax rate.

Donor-advised funds (DAFs): A donor-advised fund can help make the bunching described above more practical. Schwab Charitable among other custodians offer these accounts, which may be thought of as a much simpler foundation. You contribute amounts to the DAF, get to take a charitable deduction that year, and then recommend grants to the charities you support from the DAF on whatever timeline works for you, whether that’s all at once or over several years. We like DAFs because they take the pressure off deciding exactly where every dollar goes right away. You get the tax benefit in the year of the DAF contribution and figure out the giving as you go.

For clients who want their adult children involved in the family’s giving, a DAF can be a nice way to start that conversation as the children can also be given the power to make grants and could be the successor owners of that “family charitable fund.”

Gifting appreciated stock: If you’re holding taxable investments that have grown significantly, donating the shares directly, instead of selling them and giving cash, is often the more efficient move. You can generally deduct the full fair market value if you itemize, and neither you nor the charity owes capital gains tax on the appreciation. We’ve seen this work particularly well for clients sitting on a concentrated stock position from years of investing or from equity compensation. It’s a way to reduce that concentration in a tax efficient manner while supporting a cause you care about.

This strategy is often paired with the DAF account described above to facilitate the gifting. This brings up another advantage of a DAF. Large gifts of appreciated securities can be made to the DAF, yet the DAF can make very small dollar contributions in cash. This removes the potential hassle of multiple small securities transactions.

Qualified Charitable Distributions (QCDs): As mentioned in our previous retirement tax planning article, for clients 70½ or older, Qualified Charitable Distributions let you send money from your IRA straight to charity so that those pre-tax dollars are never taxed. In 2026, you can direct up to $111,000 from an IRA this way ($222,000 for a married couple, if each spouse gives from their own account).

If you’ve reached Required Minimum Distribution (RMD) age, a QCD can satisfy some or all of that requirement. Because QCDs are not included in your Adjusted Gross Income, they can also help keep you under the income thresholds that trigger higher Medicare premiums or additional taxation of Social Security.

In addition to lifetime gifting of pre-tax IRA assets via QCD, IRAs are also ideal to fulfill any charitable bequests at your passing by naming your charities as direct beneficiaries on the retirement accounts. A charity will have full use of IRA funds without income tax consequences unlike any individual beneficiaries.

Which Strategy Fits You

Everyone’s situation is unique, and the right combination of charitable giving strategies really depends on your age, income, and the composition of your assets, among other factors. A few questions we consider with clients:

• Would bunching a few years of giving into a DAF this year actually save you more than giving smaller amounts annually
• Do you have appreciated stock sitting in a taxable account that would make more sense to gift directly?
• If you’re 70½ or older, would a QCD make more sense than making a cash gift, or even a contribution to a DAF, also considering whether you’ve started RMDs?
• If you’re taking the standard deduction most years, are you at least using the new $1,000/$2,000 cash deduction?
• Is this a year with a bonus, a large gain, or a Roth conversion where a bigger gift might help offset that?

Final Thoughts

Giving is about your values first, and we don’t think that should ever change. But a little planning around timing and how a gift is funded can mean more of it ends up where you want it, or it takes less assets to make the same after-tax gift.

We would rather see a client’s charitable dollars go further for the causes they care about than watch those same dollars get diminished simply because nobody looked at the timing or the funding source ahead of time. Your Wealth Advisor can help you evaluate charitable giving strategies as part of your broader financial plan, so your generosity has the greatest possible impact.