What's the Smart Way to Give to Charity This Year?
The end of the year is when most people turn to charitable giving, and 2026 is the first year under a new set of rules that change how much of a gift actually reduces a tax bill. The size of a gift is one decision. How it is given is a separate one, and this year the second decision carries more weight than it used to. A few approaches can make the same dollar go further, both for the charity and on the tax return.
What changed about charitable deductions in 2026?
Two changes took effect this year. For people who take the standard deduction, there is now an above-the-line deduction of up to $1,000 for a single filer and $2,000 for a married couple filing jointly for cash gifts to public charities. For people who itemize, only charitable contributions above 0.5% of adjusted gross income are deductible, so a household with $300,000 of income does not get a deduction on the first $1,500 of giving. Neither change is large on its own, but both reward planning the timing and the form of a gift instead of writing the same check every December.
How do qualified charitable distributions work?
For anyone who is at least 70½ and has a traditional IRA, a qualified charitable distribution is often the most efficient way to give. The money goes directly from the IRA to the charity, up to $111,000 per person in 2026, and it never shows up as taxable income. That is the key difference from an ordinary donation. A QCD is an exclusion from income rather than a deduction, so it helps whether or not the household itemizes, and it steps around the new 0.5% floor entirely. It also counts toward the year's required minimum distribution. Because it lowers income, it can also mean a lower Medicare premium two years later and less of a Social Security benefit taxed, so the effect reaches past the gift itself. The transfer has to move straight from the custodian to the charity to qualify, and it has to go to a public charity rather than a donor-advised fund.
What is a donor-advised fund, and when does it help?
A donor-advised fund is an account set up for charitable giving. A contribution to it is deductible in the year it is made, and the money can be granted out to charities later on whatever timeline the donor prefers. That split between the deduction and the payout is what makes it useful. Someone in an unusually high-income year, after a business sale or a large Roth conversion, can fund the account while the deduction is worth the most, then keep supporting the same charities over the next several years.
Should you combine several years of giving into one?
This is called bunching, and the 2026 rules make it more appealing. Because the standard deduction is $32,200 for a married couple filing jointly, and because only giving above 0.5% of income now counts for itemizers, spreading modest gifts across several years can mean clearing neither threshold in any of them. Concentrating two or three years of giving into a single year, often through a donor-advised fund, can clear both at once. The household itemizes in the bunching year and takes the standard deduction in the off years, while designating gifts to one or multiple charities each year from the fund.
Does it matter whether you give cash or stock?
It can matter quite a bit. When a stock or fund has been held longer than a year and has risen in value, giving the shares directly sends the full market value to the charity and leaves the gain untaxed. Selling the same position first and donating the proceeds would trigger capital gains tax on the growth. For anyone holding appreciated investments in a taxable account, this is frequently the better way to fund a gift, including a contribution to a donor-advised fund.
Which approach fits which situation?
A retiree over 70½ with an IRA usually starts with a QCD. A household in a high-income year often looks at a donor-advised fund. A steady annual giver tends to benefit most from bunching, and anyone sitting on appreciated stock should weigh giving the shares instead of cash. Plenty of households use more than one of these in the same year.
Several of these carry a hard December 31 deadline, and a QCD in particular takes time to process through an IRA custodian. Charitable timing is also one piece of a broader year-end tax review, alongside conversions and other moves. Oasis works through which approach fits each client's situation and handles the timing before the year closes. Anyone planning to give this year is better off looking at how the gift is made, not only the amount, while there is still time to set it up.