How new 2026 rules can affect the way you give to charity
Charitable giving can be about much more than writing a check. With the right strategy, your charitable gifts can support the organizations and causes you care about while also fitting into your broader financial, tax, and estate plans.
The One Big Beautiful Bill Act (OBBBA) changed several rules affecting charitable giving beginning in 2026. Some of these changes create new opportunities, while others make it more important to think strategically about when, how, and what you give.
Here are 14 charitable giving strategies worth considering as part of your financial plan.
1. Cash Gifts
Cash remains one of the simplest ways to support a charity. For taxpayers who itemize deductions, cash contributions to qualifying public charities generally remain subject to a deduction limit of up to 60% of adjusted gross income.
Beginning in 2026, a new 0.5% of adjusted gross income floor applies to charitable deductions for taxpayers who itemize. In practical terms, the first 0.5% of AGI given to charity generally does not produce a federal charitable deduction.
For example, if your AGI is $300,000 and you make $10,000 of qualifying charitable contributions, the first $1,500 generally falls below the new threshold, leaving $8,500 potentially deductible.
For taxpayers who do not itemize, the new rules also provide a limited deduction for certain cash charitable contributions—up to $1,000 for individuals and $2,000 for married couples filing jointly.
Planning consideration: The tax impact of charitable giving can now depend significantly on the amount and timing of your total annual contributions.
2. Give Appreciated Investments Instead of Cash
If you own stocks, mutual funds, or other investments that have appreciated significantly, donating those assets directly to charity can be considerably more tax-efficient than selling them first and donating the cash.
When qualifying appreciated property is donated, you may generally receive a charitable deduction based on the asset’s fair market value while avoiding the capital gains tax that could have resulted from selling the investment.
This can be particularly attractive when you have highly appreciated investments that you no longer need or want to hold.
Planning consideration: Before selling appreciated investments to generate cash for charitable giving, consider whether donating the investment itself may provide a better tax result.
3. Use a Donor-Advised Fund
A donor-advised fund (DAF) can provide a convenient way to organize charitable giving over several years.
You make a contribution to the DAF and generally receive the charitable deduction in the year of the contribution, while recommending grants to charities over time. Cash, appreciated securities, and in some cases other assets can be contributed.
DAFs can also be useful when you want to make a large charitable contribution in one year but support charities gradually over several years.
For example, instead of donating $10,000 every year for five years, you might contribute $50,000 to a DAF in a single year and then recommend $10,000 grants annually.
Planning consideration: The new 0.5% charitable deduction floor makes the timing of larger charitable contributions particularly important. A DAF can be an effective tool for concentrating charitable deductions into years when they provide the greatest benefit.
4. Consider Qualified Charitable Distributions From an IRA
If you are age 70½ or older, a Qualified Charitable Distribution (QCD) can allow you to transfer money directly from an IRA to a qualifying charity.
The distribution can count toward your required minimum distribution while generally being excluded from taxable income, subject to the applicable rules and annual limits.
For retirees who regularly give to charity, this can be one of the most tax-efficient ways to make charitable gifts from retirement assets.
Planning consideration: Unlike a traditional charitable deduction, a QCD generally keeps the donated amount out of taxable income altogether. This can be especially valuable if you do not itemize deductions.
5. Charitable Remainder Trusts
A Charitable Remainder Trust (CRT) can be useful when you have highly appreciated assets and want to support charity while retaining an income stream.
A CRT generally allows assets to be placed into an irrevocable trust, with income paid to you or another beneficiary for a specified period or for life. After that period, the remaining assets pass to charity.
This can be particularly useful for someone holding a concentrated position with a very low tax basis who wants to diversify while creating an income stream.
Planning consideration: CRTs are complex irrevocable arrangements and involve legal, tax, and investment considerations. They are generally most appropriate when charitable intentions and broader financial goals are substantial enough to justify the complexity.
6. Charitable Gift Annuities
A charitable gift annuity allows you to contribute assets to a charity in exchange for a stream of payments, typically for life.
This can appeal to individuals who want to make a significant charitable gift while also receiving predictable income.
A portion of the contribution may qualify for a charitable deduction, and part of the payments may receive favorable tax treatment depending on the circumstances.
Planning consideration: A charitable gift annuity generally involves giving up access to the contributed assets. It is important to evaluate the income, liquidity, and estate-planning consequences before making a commitment.
7. Name a Charity as a Beneficiary
Charitable giving does not have to happen during your lifetime.
You can name a charity as a beneficiary of assets such as an IRA, 401(k), annuity, or life insurance policy.
Retirement accounts can be particularly attractive assets to leave to charity because qualified charities generally do not pay income tax on distributions. By contrast, individual heirs may ultimately owe income tax on inherited traditional retirement accounts.
Planning consideration: Review beneficiary designations regularly and coordinate them with your will, trust, and overall estate plan.
8. Make a Charitable Bequest
A charitable bequest allows you to leave money or property to a charity through your will or trust.
For many families, this provides an opportunity to make a significant charitable contribution without giving up assets during their lifetime.
With the federal estate and gift tax exemption now significantly higher than it was historically, estate-tax considerations may be less important for many households. That makes it particularly important to consider whether charitable gifts should be made during life, at death, or through a combination of both.
Planning consideration: If you intend to leave a significant amount to charity, make sure the organization is clearly identified and that the language in your estate documents reflects your wishes.
9. Use Life Insurance for Charitable Giving
Life insurance can be used to create a significant charitable gift from relatively modest annual premiums.
Depending on how the policy is structured, you may be able to make a charity the owner and beneficiary of a policy or otherwise incorporate life insurance into your charitable and estate plans.
For individuals who have assets they want to preserve for heirs but also want to make a substantial charitable contribution, life insurance can sometimes provide an efficient way to accomplish both goals.
Planning consideration: The tax consequences depend heavily on how the policy is structured. Ownership and beneficiary designations matter, so this strategy should be coordinated with your financial, tax, and estate-planning professionals.
10. Charitable Lead Trusts
A Charitable Lead Trust (CLT) takes the opposite approach of a charitable remainder trust.
The trust makes payments to charity for a specified period, after which the remaining assets can pass to family members or other beneficiaries.
This type of strategy can be particularly relevant for families with substantial wealth who want to support charitable organizations while also transferring assets to the next generation.
Planning consideration: CLTs are highly specialized estate-planning strategies and generally make sense only in situations involving significant assets and sophisticated estate-planning goals.
11. Establish a Private Foundation
A private foundation can provide a family with significant control over charitable activities, including which organizations receive grants and how the family’s philanthropic mission develops over time.
Foundations can also provide a framework for involving children and future generations in charitable decision-making.
However, they involve more administrative responsibilities, compliance requirements, and expenses than many other charitable vehicles.
Planning consideration: For many families, a donor-advised fund may provide much of the same organizational benefit with considerably less administrative complexity. A private foundation may make more sense when control, family involvement, or the scale of charitable activity warrants it.
12. Consider a Philanthropic LLC
Some families with significant philanthropic activities use an LLC as a central structure for managing their charitable efforts.
An LLC can provide flexibility in how a family manages investments, makes grants, conducts philanthropic activities, and coordinates different charitable entities.
However, contributions to an LLC generally do not receive a charitable deduction simply because the money was contributed to the LLC. The tax treatment depends on what the LLC ultimately does with the funds.
Planning consideration: This is generally a strategy for families with more sophisticated philanthropic goals rather than a replacement for a traditional charitable deduction.
13. Donate Cryptocurrency
Cryptocurrency is generally treated as property for federal tax purposes. That means donating appreciated cryptocurrency can potentially provide many of the same benefits as donating appreciated securities.
If you have cryptocurrency that has increased substantially in value, donating it directly to a qualifying charity may allow you to avoid recognizing the capital gain while potentially receiving a charitable deduction based on the asset’s fair market value.
Special substantiation and appraisal requirements can apply, particularly for larger gifts.
Planning consideration: Cryptocurrency donations require additional documentation, so plan ahead rather than waiting until the end of the year.
14. Consider New Charitable Opportunities Involving Trump Accounts
Beginning in 2026, certain charitable organizations can contribute to eligible Trump Accounts for children.
This creates a new potential avenue for philanthropic organizations and families interested in supporting children and younger generations.
Because this is a new provision, the rules and implementation details may continue to develop as additional guidance becomes available.
Planning consideration: Families interested in intergenerational giving should monitor how these accounts develop and whether contributions to them fit within their broader charitable and estate-planning objectives.
The Best Charitable Strategy Is About More Than Taxes
Tax savings can be an important part of charitable planning, but they should not be the only consideration.
The most effective charitable strategy starts with a simple question:
What do you want your giving to accomplish?
For some people, that means supporting a handful of organizations every year. For others, it means creating a family legacy, funding a particular cause, supporting their community, or establishing a long-term philanthropic plan.
Once your goals are clear, the structure and timing of your gifts can be evaluated.
A few questions to consider:
Are you holding highly appreciated investments that you could donate instead of selling?
Would concentrating several years of charitable giving into a single year make sense for your tax situation?
Could a donor-advised fund simplify your long-term giving?
If you are over age 70½, could QCDs be incorporated into your IRA withdrawal strategy?
Are your retirement-account and insurance beneficiary designations consistent with your charitable goals?
Would involving children or grandchildren help create a lasting family philanthropic tradition?
Are you considering a large or complex gift that requires coordination with your estate plan?
Make Charitable Giving Part of Your Financial Plan
Charitable giving is most effective when it is integrated into the rest of your financial life—not treated as a year-end tax decision.
At HWC Financial, we help clients look at charitable giving in the context of their investment strategy, retirement income, tax situation, estate plan, and long-term financial goals.
Whether you give a few thousand dollars a year or are considering a much larger philanthropic commitment, there may be ways to make your giving more strategic and tax-efficient.
If charitable giving is an important part of your financial goals, we can help you evaluate the options and determine which strategies may fit your overall financial plan.
