The holiday season is when generosity takes center stage. Giving Tuesday falls on December 1 this year, and the weeks between Thanksgiving and December 31 are when many families make most of their annual gifts.
This year the timing matters more than usual. The One Big Beautiful Bill Act, signed in 2025, changed how charitable gifts are taxed starting in 2026. Some donors will get a new deduction they never had before. Others, especially higher earners who itemize, will see their tax benefit shrink.
At Verde Capital Management, we believe charitable giving belongs inside your financial plan, not as an afterthought in late December. When you give with intention, you can support the causes you care about, involve your family, and keep more of your wealth working for both your goals and theirs. This guide walks through how to do that.
Start with purpose, then pick the tools
The best giving strategy starts with your values, not tax rules. Before choosing a method, it helps to answer a few questions:
- What do you want your giving to accomplish? Local impact, faith, education, health research, or something else.
- Who do you want to involve? Many families use giving to pass values to children and grandchildren.
- How much do you want to give, and over what timeframe? A yearly budget, a multi-year commitment, or a legacy gift.
- What assets make the most sense to give? Cash isn’t always the most efficient choice.
Writing down a simple giving plan turns scattered year-end checks into a deliberate strategy. It also makes the tax decisions below much easier, because you already know the “why” and the “how much.”
What changed for charitable deductions in 2026
Four changes from the new tax law affect most donors this year.
1. A new deduction for people who don’t itemize. Starting in 2026, you can deduct up to $1,000 of cash gifts ($2,000 for married couples filing jointly) even if you take the standard deduction. Gifts must be cash to a public charity. Gifts to donor-advised funds and most private foundations don’t count, and the amount isn’t indexed for inflation.
2. A 0.5% floor for itemizers. If you itemize, only the portion of your gifts above 0.5% of your adjusted gross income (AGI) is deductible. For a couple with $300,000 of AGI, the first $1,500 of giving produces no deduction.
3. A 35% cap for the top bracket. Donors in the 37% bracket now receive a tax benefit of no more than 35 cents per dollar deducted. A $10,000 gift that once saved $3,700 now saves $3,500.
4. The 60% limit is permanent. Cash gifts to public charities remain deductible up to 60% of AGI, and that limit no longer has an expiration date.
The standard deduction also remains high: $16,100 for single filers and $32,200 for married couples filing jointly in 2026. Most households won’t itemize, which is why the strategies below focus on getting more out of every dollar given.
Six charitable giving strategies worth knowing
1. Give appreciated stock instead of cash
If you’ve held an investment for more than a year and it has grown in value, donating it directly is often more efficient than selling it and giving the cash. You generally avoid capital gains tax on the growth, and if you itemize, you can deduct the full market value (up to 30% of AGI for gifts to public charities). The charity can sell the shares tax-free.
This also fits naturally with portfolio management. Gifting highly appreciated positions can help rebalance a portfolio or reduce a concentrated holding without a tax bill. Note that the new non-itemizer deduction applies to cash only, so stock gifts help most for those who itemize.
2. “Bunch” several years of giving into one
With a high standard deduction and the new 0.5% floor, many donors get little tax benefit from giving the same amount every year. Bunching means combining two or three years of planned gifts into a single year. That pushes you above the standard deduction in that year, and you take the standard deduction in the off years.
The new 0.5% floor makes bunching more attractive: you clear the floor once instead of every year.
3. Use a donor-advised fund (DAF)
A donor-advised fund is like a charitable savings account. You contribute cash, stock or other assets, take the deduction in the year you contribute, and then recommend grants to charities over time. The money can be invested and grow tax-free while you decide where it goes.
DAFs pair well with bunching. You can make one large contribution in a high-income year and still give to your favorite charities on your usual schedule. They’re also a simple way to involve family members in grant decisions.
4. Give from your IRA with a qualified charitable distribution (QCD)
If you’re 70½ or older, you can send up to $111,000 in 2026 directly from your IRA to a qualified charity. The distribution isn’t counted as taxable income, and once you reach required minimum distribution (RMD) age (currently 73), it can count toward your RMD.
QCDs are often the most efficient way for retirees to give. They help even if you take the standard deduction, and they aren’t subject to the new 0.5% floor. Keeping income lower can also help with Medicare premiums and taxes on Social Security. QCDs cannot go to donor-advised funds or private foundations.
5. Consider a charitable trust for larger or legacy gifts
For bigger gifts, a charitable remainder trust can provide you with income for life or a set term, with the remainder going to charity. A charitable lead trust works in reverse, paying charity first and passing the remainder to heirs. These require legal and tax help, but they can be powerful tools for selling highly appreciated assets, creating income, or reducing estate taxes. A one-time QCD of up to $55,000 can also fund certain split-interest arrangements like these.
6. Name a charity as a beneficiary
Traditional IRAs are often the least tax-efficient asset to leave to children, who must pay income tax on withdrawals. Charities pay no income tax. Naming a charity as a beneficiary of part of an IRA, while leaving other assets to family, can stretch your legacy further. It’s one of the simplest ways to give, and it only takes a beneficiary form.
Which strategy fits you?
| Strategy | Often best for | Key benefit | Watch out for |
|---|---|---|---|
| Cash gift (non-itemizer) | Most households taking the standard deduction | New deduction up to $1,000 / $2,000 | Cash to public charities only; no DAFs |
| Appreciated stock | Investors with long-term gains who itemize | Avoid capital gains and deduct full value | Must hold over 1 year; 30% of AGI limit |
| Bunching | Donors near the standard deduction | Itemize in a “giving year” | Requires planning across several years |
| Donor-advised fund | High-income years, families, bunchers | Deduct now, grant later | Not eligible for the non-itemizer deduction or QCDs |
| QCD from an IRA | Retirees 70½ and older | Tax-free giving that can satisfy RMDs | $111,000 limit in 2026; can’t go to DAFs |
| Charitable trust | Large gifts, income needs, estate planning | Income stream plus charitable impact | Legal setup and ongoing costs |
| Beneficiary designation | Anyone with an IRA and charitable intent | Leaves taxable dollars to tax-exempt charity | Keep forms up to date |
Your year-end giving checklist
Most gifts must be completed by December 31 to count for 2026, so starting early matters.
- Set your giving budget for the year, and decide whether this is a “bunching” year.
- Review your portfolio for long-term appreciated positions to donate.
- Start stock transfers early. Brokerage and charity transfers can take a week or more, especially in December.
- If you’re 70½ or older, schedule your QCD with your IRA custodian well before year-end.
- Open or fund a donor-advised fund if you want the deduction this year but need more time to choose charities.
- Keep records. You need a written acknowledgment from the charity for any single gift of $250 or more.
- Verify the charity is a qualified 501(c)(3) organization using the IRS Tax Exempt Organization Search.
- Review beneficiary designations on IRAs and other accounts.
- Talk with your advisor and tax professional before making large gifts.
Giving that lasts
Generosity is one of the most rewarding parts of building wealth. With the right plan, it can also be one of the most efficient. The 2026 rule changes make it more important than ever to match the right assets and timing to your goals.
At Verde Capital Management, we help clients build giving into their overall financial plan, coordinating investments, retirement income and taxes so their generosity goes further. If you’d like to talk through a giving strategy before year-end, contact our team.
This material is for educational purposes only and is not tax, legal or investment advice. Tax rules are complex and subject to change. Please consult a qualified tax professional before making charitable gifts.
