July, 2026
How to Give Generously, Give Smartly, and Make It Last
Charitable giving starts with something simple: you want to help and make an impact. Maybe it’s a school that changed your life, a health organization that supported your family, or a community cause you’ve quietly believed in for years. The impulse is personal. The giving should be too.
But how you give matters. The right approach can amplify the impact of your generosity, preserve more of your wealth for causes you care about, and spare your heirs from unnecessary complications down the road. The wrong approach can cost you real money in taxes, limit your flexibility, or, as a recent federal lawsuit has reminded us, leave you with fewer rights over your donated dollars than you expected.
This is not an article about complicated tax strategies. It is a practical guide to the most common charitable giving vehicles, written for people who want to give intentionally, give tax-efficiently, and give in a way that reflects their values and goals.
A Word on Why This Matters Now
The tax landscape around charitable giving shifted meaningfully in 2026. The One Big Beautiful Bill introduced several changes worth knowing:
- Non-itemizers can now deduct up to $1,000 (single) or $2,000 (married filing jointly) for cash donations to qualifying charities. This is new.
- Itemizers face a new floor: charitable deductions are only available above 0.5% of adjusted gross income. For a couple with $250,000 of AGI, the first $1,250 of donations is not deductible.
- High earners are capped at a 35% tax benefit on charitable deductions, even if their marginal rate is 37%.
- Qualified Charitable Distributions from IRAs are unchanged. For donors age 70½ and older, QCDs remain the most tax-efficient giving vehicle available.
Charitable Giving Vehicles: What You Should Know
Direct Giving
The simplest form of giving. You write a check, make an online gift, or charge a credit card. You receive a deduction if you itemize, or up to $2,000 if you don’t. The charity receives the funds immediately. This works well for recurring gifts to organizations you know and trust. It offers no flexibility after the fact and no opportunity to give appreciated assets.
Donating Appreciated Securities
If you own stock, a mutual fund, or an ETF that has grown significantly in value, donating those shares directly to a charity is almost always more efficient than selling the position first and donating the cash.
When you donate appreciated securities held for more than one year, you avoid the capital gains tax you would have owed on the sale, and you receive a deduction for the full fair market value of the shares. The charity receives the full value as well.
For example, suppose you purchased $10,000 of stock that is now worth $50,000. If you sold it and donated the proceeds, you would owe capital gains tax on $40,000 of gain, potentially $8,000 or more depending on your rate and state. If you donate the shares directly, the capital gain disappears, you deduct $50,000, and the charity receives $50,000. Everyone wins except the IRS.
Qualified Charitable Distributions (QCDs)
For donors age 70½ and older who hold traditional IRAs, the qualified charitable distribution is the most tax-efficient giving tool available. A QCD allows you to transfer funds directly from your IRA to a qualifying charity, up to $111,000 per person in 2026 (or $222,000 for a married couple if both spouses have their own IRAs), without the distribution being counted as taxable income.
This matters for several reasons:
- It reduces your adjusted gross income directly, which can lower Medicare premiums and reduce exposure to the Social Security income tax.
- The tax benefit is built in whether or not you itemize.
- QCDs satisfy required minimum distributions, which means the mandatory withdrawal doesn’t become taxable income if directed to charity.
One important limitation: QCDs cannot go to donor-advised funds or private foundations. They must go directly to a qualifying public charity.
Donor-Advised Funds (DAFs)
Donor-advised funds have become the most widely used charitable vehicle for affluent givers, and for good reason. The mechanics are straightforward: you contribute assets to an account sponsored by a charitable organization (such as Schwab’s DAFgiving360, Fidelity Charitable, and Vanguard Charitable) receive an immediate tax deduction, and then recommend grants over time to the charities of your choice. The assets inside the DAF grow tax-free.
DAFs are particularly useful for “bunching”, concentrating multiple years of giving into a single tax year to clear the standard deduction threshold, then distributing the funds gradually over subsequent years. You can contribute cash, appreciated securities, and, in some cases, illiquid assets like closely held stock or real estate.
However, there is something donors should understand clearly, and a pending federal lawsuit has brought it into sharp relief. When you contribute to a donor-advised fund, you cede legal control of those assets to the DAF sponsor. You become an “adviser,” not an owner. The sponsor is not legally required to follow your grant recommendations.
Recently, a lawsuit was filed against WaterStone, a Christian DAF sponsor, involving more than $21 million and is testing whether donors have any enforceable advisory rights at all, including the right to communicate with the sponsor, receive account information, or transfer the account elsewhere. The case could take years to resolve. In the meantime, it is worth asking your sponsor:
- What is the policy on grant recommendations, and under what circumstances are they denied?
- Can successor advisers be named, and can they name their own successors?
- What happens to funds if there are no successor advisers?
- Can the account be transferred to another sponsor?
Most national sponsors, including Schwab’s DAFgiving360, Fidelity Charitable, and Vanguard Charitable, have clear, donor-friendly policies on all of the above. The lesson from the WaterStone case is not to avoid DAFs. It is to choose your sponsor carefully and read the agreement before contributing.
Charitable Remainder Trusts (CRTs)
A charitable remainder trust allows you to contribute appreciated assets into an irrevocable trust, receive an income stream for a set period or for life, take a partial charitable deduction upfront, and have the remaining assets pass to a charity at the end of the trust term.
This can be a useful structure for someone who holds a highly appreciated, low-basis asset such as a concentrated stock position or investment real estate, and wants to diversify without triggering an immediate capital gain, while also generating income and a charitable benefit. The mechanics are more complex and the setup costs are higher. This is a planning conversation, not a checkbook decision.
Charitable Lead Trusts (CLTs)
The structural mirror of a CRT. In a charitable lead trust, the charity receives income for a defined period, and the remaining assets pass to your heirs at the end of the term. This can be an effective estate planning tool, reducing gift and estate taxes on wealth transferred to the next generation while benefiting a charity in the near term.
Private Foundations
A private foundation offers the highest level of control in charitable giving. You fund it, you govern it, and you direct its grants according to your own strategy. Foundations can maintain a long-term philanthropic identity and engage deeply with grantees over time.
They come with meaningful requirements:
- Annual distributions of at least 5% of assets
- IRS reporting and public disclosure
- Excise taxes on investment income
- Strict rules around self-dealing with family members
The administrative burden is real, and the minimum practical size is generally considered to be $1 million or more. For families with significant assets and a serious philanthropic mission, a private foundation can be a powerful and lasting vehicle. For most donors, a donor-advised fund offers similar benefits with a fraction of the complexity.
Choosing the Right Vehicle
These options are not mutually exclusive. Many clients use more than one, combining a donor-advised fund for annual giving with QCDs from an IRA, or pairing a CRT with a DAF to handle the charitable remainder. The right approach depends on your income, your assets, your giving goals, and your tax situation. Having a conversation with us before year-end is worth more than one after it.
Let’s Have the Conversation
We work with a number of clients who are thoughtful about giving. Some have been doing it the same way for years and wonder if there’s a better approach. Others are sitting on appreciated positions and haven’t yet considered using them charitably. A few are approaching RMD age and don’t yet know about QCDs.
If any of this resonates with you, we would welcome the conversation. Not to complicate your giving, but to make sure your generosity is structured in a way that reflects both your values and your financial picture. We invite your questions with interest.
