How to enhance your charitable giving strategy in 2026
The end of the year is a season when generosity often comes to the forefront. Many people are looking for ways to give back by supporting those in need and contributing to the causes and charities close to their hearts.
It's common to give to charities in response to their direct requests, especially at year-end. While this type of giving can serve a good purpose, adding structure to your charitable giving strategy and thinking long term can create better outcomes for both you and the organizations you support.
Key takeaways
- Giving strategically can maximize your philanthropic impact and potential tax benefits.
- New charitable tax deduction rules in 2026 may affect when and how you contribute.
- The right charitable giving vehicle can help align donations with your broader financial and estate planning goals.
5 charitable giving strategies to consider
There are many ways to achieve your philanthropic goals, but a more intentional approach can help maximize your impact. In this video, a First Citizens Wealth philanthropic and charitable strategist shares five foundational strategies that can help make your charitable giving more purposeful and effective.
Tax benefits of charitable giving
Once you've established your giving goals, it's important to understand how charitable tax deductions work and what changed in 2026.
What changed under the OBBBA
The One Big Beautiful Bill Act, or OBBBA, introduced several changes that may affect your charitable giving planning for this year and beyond.
- Deduction limits for cash and noncash gifts: The law made permanent the existing 60% deduction limit for qualifying cash contributions to public charities. The 30% limit for qualifying long-term appreciated assets also remains in place.
- New deduction threshold: Taxpayers who itemize can generally deduct charitable contributions only to the extent they exceed 0.5% of adjusted gross income, or AGI. For someone with $500,000 in AGI, this means the first $2,500 in contributions generally aren't deductible.
- New deduction for non-itemizers: Taxpayers who claim the standard deduction can now deduct up to $1,000—or $2,000 for married couples filing jointly—in eligible cash contributions.
The law also limits the overall tax benefit of itemized deductions to 35% for taxpayers in the highest federal income tax bracket. This could further limit the tax savings from your charitable contributions.
Tax-efficient charitable giving
Understanding these rules can help you identify opportunities to make your charitable contributions more tax-efficient. Depending on your financial situation, two strategies may be worth considering.
- Bunching charitable contributions: Combining several years of donations into one tax year, particularly when your income is unusually high, may help maximize available deductions. This strategy can also help you exceed the standard deduction and benefit from itemizing in certain years.
- Donating appreciated assets: Contributing long-term appreciated investments like stocks may help you avoid capital gains taxes while still qualifying for an immediate charitable deduction. This can be especially beneficial if you hold concentrated stock positions or investments with significant unrealized gains.
- Qualified charitable distributions, or QCDs: Eligible IRA owners age 70 1/2 or older can make direct transfers to qualified charities, potentially reducing taxable IRA income. Because QCDs can reduce AGI without requiring taxpayers to itemize, they may be particularly attractive under the new deduction rules.
Match a charitable giving vehicle to your goals
How you structure your charitable giving can be just as important as the amount you contribute. Different charitable vehicles offer varying levels of flexibility, control, administrative burden and potential tax benefits. Your financial and tax advisors can help determine which options align with your broader wealth strategy.
Donor advised funds
A donor advised fund, or DAF, offers a flexible way to manage charitable contributions. You make an irrevocable contribution to a sponsoring charitable organization, potentially qualify for an immediate tax deduction and retain advisory privileges over investments and grants.
Because contributions and grants don't have to occur in the same year, DAFs can be especially useful for coordinating larger gifts with high-income years while supporting charities over time.
Private foundations
For individuals and families with substantial philanthropic resources, a private foundation—compared to a DAF—may provide greater control over investments and grant-making. It can also create a formal structure for involving multiple generations in giving decisions.
However, private foundations typically involve more complex tax rules, administrative responsibilities and operating costs than DAFs.
Charitable trusts
Charitable trusts may be appropriate when your giving goals overlap with income needs or estate planning.
A charitable remainder trust can provide income to designated beneficiaries before transferring remaining assets to charity. A charitable lead trust works in reverse, making payments to charities before transferring remaining assets to other beneficiaries. Both require careful planning and structuring.
Charitable gift annuities
A charitable gift annuity allows you to make an irrevocable gift to a qualified charity in exchange for fixed payments for life. After the payment obligations end, the remaining funds support the charitable organization.
Creating a holistic charitable giving strategy
A thoughtful charitable giving strategy considers more than the causes you support. When you give, what you contribute and how you structure your donations can all influence the financial and philanthropic benefits.
Work with your tax advisor and financial team to evaluate your options and align your charitable giving with your broader wealth planning goals.
Turn year-end giving to a lasting legacy with a First Citizens Donor Advised Fund.
