Strategic charitable giving can help reduce taxes while supporting the causes you care about. This guide outlines key 2026 strategies—including appreciated securities, Donor-Advised Funds (DAFs), and Qualified Charitable Distributions (QCDs)—and how they fit within a Total Net Worth Approach.

Updated for 2026: This commentary reflects current charitable giving strategies, deduction thresholds, and planning considerations for the 2026 tax year.

Charitable giving can make a meaningful impact — both for the causes you care about and your long-term financial plan. When structured strategically, charitable gifts can help reduce taxes, improve cash-flow efficiency, and support a more holistic wealth strategy. This guide breaks down how charitable tax deductions work, the most effective giving strategies for 2026, and how options like appreciated securities, Donor-Advised Funds (DAF), and Qualified Charitable Distributions (QCD) can help you maximize your generosity while staying aligned with your Total Net Worth Approach. 

Here is a quick reference on how charitable contributions can be used in tax planning. As a reminder, you should review all tax planning strategies with your own tax advisor.  As a basic rule of thumb, I will take a three-bucket approach to generalize when considering gifting to a charity: 

Bucket 1 – For Individuals Under Age 70-1/2 Who Itemize

If you itemize because your deductions exceed the standard deduction, you can receive a full benefit for charitable gifts (subject to Adjusted Gross Income / AGI limits). For many people, donating appreciated securities instead of cash can be even more tax-efficient. Why appreciated securities can be a smart choice: 

• You avoid paying capital gains tax on any appreciation in the donated securities
• You can deduct the full fair market value of the donated securities 
• You potentially give more without affecting your cash flow 

However, if you do not itemize, a charitable deduction is available in arriving at taxable income of $1,000 for a single taxpayer and $2,000 for a married filing joint return. 

Bucket 2 – For Individuals Age 70-1/2 and Older – Using Qualified Charitable Distributions (QCD) From Your IRA Account.

Once you reach age 70-1/2, a QCD becomes one of the most powerful charitable planning tools available. A QCD allows you to make a tax-free gift directly from your IRA to a qualified charity. In 2026, you can donate up to $111,000 this way.  

Benefits of using a QCD: 

• The gift is excluded from taxable income 
• It can count toward your Required Minimum Distribution (RMD) 
• It provides a tax benefit even if you take the standard deduction 
• It can help lower future RMDs and stabilize retirement cash flow 

Many retirees find QCDs to be the most efficient way to support charitable organizations while managing their taxable income. However, you MUST make the donation directly from the IRA to the charity and report the amounts to your tax preparer, so they are accounted for properly.   

Bucket 3 – Charitable Giving at Death 

Charitable intent can also be part of your estate plan. Some assets are significantly more tax-efficient to leave to charity than to family members.  

The most efficient assets to donate at death are Income in Respect of a Decedent (IRD) assets, such as IRAs, 401(k)s, annuities. These assets do not receive a step-up in basis at death, meaning heirs would owe tax on withdrawals but charities would not. Donating IRD assets to charity preserves more tax-advantaged assets for your loved ones.  

Standard Deduction Reference for 2026 

To itemize charitable contributions, your deductions must exceed the standard deduction of: 

• Single: $16,100 
• Married Filing Jointly: $32,200 
• Head of Household: $24,150 
• Additional for age 65+: $2,050 (single) or $1,650 (per spouse) 

If your deductions fall short of these amounts, a strategy like a QCD or a DAF can help ensure your charitable giving remains tax-efficient.  

How AGI Limits Affect Your Deductions 

For those who itemize their deductions, there is a 0.50% AGI disallowance of your charitable contributions. For example, if your AGI is $200,000 and you contributed $1,500 in charitable gifts, $1,000 of your charitable gifts are disallowed (calculated as $200,000 x 0.50%), allowing for $500 to be available as a deduction.   

After you consider the 0.50% disallowance, the IRS limits the dollar amount of charitable contributions you can deduct in a single year based on your AGI: 

• Cash gifts: up to 60% of AGI 
• Short-term appreciate assets or inventory: 50% of AGI 
• Use-unrelated gifts Lower of basis or FMV): 50% of AGI
• Long-term appreciated assets: the taxpayer can elect FMV deduction (30% of AGI) or Basis of the asset (50% of AGI)  

Any phased-out deductions can be carried forward for up to five years.  

Examples: How Strategic Giving Works in Practice 

These are hypothetical examples and not representative of any specific situation. Your results will vary.  

Example 1: Retired Couple, Ages 72 and 74 

AGI: $150,000 

Itemized deductions: $19,000 (of which $4,500 are made to charity) 

Standard deduction with age adjustments: $35,500 

The standard deduction of $35,500 will be taken. However, only $2,000 of the $4,500 in charitable contributions can be deducted in arriving at taxable income (calculated as $4,500 – $150,000 x 0.50% equals $3,750 but is limited to $2,000 when not itemizing). However, because they are age 70-1/2, making the same gift as a QCD from an IRA will allow for a $4,500 benefit. 

Example 2: Couple Ages 59 and 61 

AGI: $150,000 

Itemized deductions: $29,000 (of which $4,500 are made to charity) 

Standard deduction: $32,200 

Only $2,000 of the $4,500 in charitable contributions can be deducted in arriving at taxable income (calculated as $4,500 – $150,000 x 0.50% equals $3,750 but is limited to $2,000 when not itemizing). 

Here are considerations if an additional $35,000 of appreciated stock (basis $10,000) is donated: 

• Avoids tax on $25,000 of gains 
• Raises the deductions to $63,250 (calculated as $29,000 + $35,000 – $150,000 x 0.50%)  
• The AGI limitation when using the $35,000 FMV security to a charity is $45,000 (calculated as $150,000 AGI x 30% limitation). Meaning, the maximum that can be deducted based on AGI of $150,000 is $45,000. Because only $35,000 of donations have been made. The entire amount can be taken in the current tax year.   
• Consider funding a DAF with the $35,000 of securities so you get a current year tax deduction but distributing the funds in the DAF over a number of future tax years  

Common Questions About Charitable Giving 

We often hear the following questions from clients: 

Do charitable donations always reduce taxes? 

Not always. There is a $1,000 (single filers) and $2,000 (joint filers) limitation if not itemizing. However, if you are itemizing deductions, determine the amount to exceed the standard deduction or use a strategy such as a QCD after the 0.50% disallowance is factored. 

Is donating stock more beneficial than cash? 

Often yes. Especially when the stock has appreciated significantly in value. 

How does a Donor-Advised Fund help? 

It allows you to bunch several years of giving into one large contribution, potentially increasing your deductions for that year. 

Why are QCDs so valuable for retirees? 

They reduce taxable income, help manage RMDs, and provide tax benefits without itemizing. 

Which assets are best to leave to charity in an estate plan? 

IRAs and other IRD assets are typically the most efficient. 

The Winthrop Wealth Perspective 

Charitable giving is most effective when it is aligned with your overall financial strategy, in our opinion. We follow a Total Net Worth Approach to wealth management that combines both comprehensive financial planning and investment management. Through our Total Net Worth Approach, we can help clients evaluate charitable opportunities within the broader context of their finances including cash flow, tax planning strategies, investments, estate planning strategies, and long-term goals.  For clients who receive both financial planning and investment advisory services under agreement. No strategy assures success or protects against loss. Investing involves risk, including loss of principle. 

With the right structure, your charitable giving can create meaningful impact for the causes you care about and support the long