The New Math of Charitable Giving

If you give to charity, 2026 changed the arithmetic on you. Three new rules took effect, and they pull in different directions: one makes small gifts less valuable, one finally rewards people who don’t itemize, and one trims the benefit for top earners.

None of them change why you give. All of them change what your giving is worth at tax time — and a few adjustments can recover most of what the new rules take away.

What changed

1. A new floor for itemizers. The first 0.5% of your adjusted gross income in charitable gifts is no longer deductible. With $200,000 of AGI, the first $1,000 you give does nothing for your taxes. Everything above it may still be deductible.

2. A deduction for people who don’t itemize. This one is good news, and it’s new. If you take the standard deduction, you can now deduct up to $1,000 in cash gifts ($2,000 for married couples filing jointly) on top of it. Most households take the standard deduction, so for the first time in years their giving carries a tax benefit again. The catch: it must be cash given to operating charities. Gifts to donor-advised funds and most private foundations don’t count.

3. A cap for the top bracket. If you’re in the 37% bracket, your itemized deductions — charitable gifts included — now deliver only about a 35% benefit. Every dollar you deduct is worth slightly less than it used to be.

The single best move: give the stock, not the cash

If you own stock, a fund, or property that has gone up in value and you’ve held it more than a year, giving the shares themselves is almost always better than selling them and donating the proceeds.

Here’s why. When you sell first, you owe capital gains tax on the growth, so less money reaches the charity. When you transfer the shares directly, that tax never happens — the charity is tax-exempt and sells them free of tax — and you generally deduct the full market value.

This move got more valuable in 2026, not less. Because the 0.5% floor applies to your total giving, a larger gift clears it more easily — and market value is a bigger number than after-tax cash.

Bunch your giving instead of spreading it

The standard deduction is high — $16,100 for single filers and $32,200 for married couples in 2026. That means steady annual giving often produces no itemized benefit at all, because your total deductions never clear the standard deduction line.

Bunching fixes that. Instead of giving the same amount every year, you concentrate several years of giving into one year. That year, you itemize and clear both the standard deduction and the new floor. In the off years, you take the standard deduction.

The obvious objection: charities need the money every year, not in lumps. That’s what a donor-advised fund solves. You contribute a large amount in one year and take the deduction then. The money sits in the fund, invested and growing tax-free, and you recommend grants to your charities on whatever schedule you like — steady annual support, funded by a single concentrated deduction.

If you’re over 70½, give from the IRA

This is the most underused move in retirement giving. Once you reach age 70½, you can send money straight from your IRA to a charity — up to $111,000 per person in 2026. It’s called a qualified charitable distribution, and it works differently from everything else here.

A QCD isn’t a deduction. It’s income you never report at all. The money leaves your IRA, goes to the charity, and never appears on your return.

That distinction matters more than it sounds. Because the money never enters your income, a QCD skips the 0.5% floor and the 35% cap completely, and it works whether or not you itemize. It can also satisfy part or all of your required minimum distribution — while keeping your income lower, which can reduce your Medicare premiums and the share of your Social Security that gets taxed.

The QCD rules in brief

Two mechanics decide whether it counts. The money must move directly from your IRA custodian to the charity; a check written to you and passed along is just a taxable withdrawal. And donor-advised funds and private foundations don’t qualify as recipients — which catches out donors who give that way for everything else. Get a written acknowledgment from the charity, as with any gift.

What you give changes what you deduct

Not all gifts are treated alike. The asset you choose determines both the size of your deduction and the annual ceiling that applies to it.

Who receives the gift matters too. Public charities — most 501(c)(3)s, churches, schools, hospitals, and donor-advised funds — carry the highest ceilings, shown above. Private foundations are less generous: 30% of AGI for cash and 20% for appreciated assets. If you give more than a ceiling allows in one year, the excess carries forward for up to five years.

Keep the paperwork

A deduction you can’t document is a deduction you don’t have. Keep a bank record or a written acknowledgment from the charity for every gift. For anything of $250 or more, you need a written acknowledgment from the charity in hand before you file. Non-cash gifts above certain amounts require Form 8283, and larger property gifts often need a qualified appraisal. And if you received something in return — a dinner, a ticket — you can only deduct the amount above its value.

What we’d look at with you

Charitable planning has become genuinely technical, and it interacts with everything else on your return — capital gains, Roth conversions, Medicare premiums, required distributions, and estate plans. The questions worth answering before December: Which asset should fund this year’s giving? Should several years be bunched into one? Is this the year a donor-advised fund makes sense? And if you’re over 70½, is any of your giving still leaving the IRA the expensive way?

Those answers change with your income each year. That’s exactly the sort of thing a plan should be catching for you.