Three Smart Ways to Give to Charity in 2026
If you like supporting causes you care about, you probably also like keeping more money in your pocket. The good news? With a little planning, you can do both. The tax law signed this past summer— the One Big Beautiful Bill Act—changed how charitable giving works starting this year. Some of those changes make giving less valuable from a tax standpoint. But others open up new opportunities. Let’s walk through three powerful tools that can help you give smarter: Qualified Charitable Distributions, Donor-Advised Funds, and the new above-the-line deduction for everyday givers.
Qualified Charitable Distributions: A Retiree’s Best Friend
If you’re 70½ or older and have an IRA, a Qualified Charitable Distribution (QCD) might be the most tax-efficient way to support your favorite charity. Here’s how it works: instead of taking money out of your IRA and then writing a check to charity, you have your IRA custodian send the money directly to the charity. The donation never hits your tax return as income. That’s a big deal.
In 2026, you can donate up to $111,000 per person through QCDs. If you’re married, your spouse can also give up to $111,000 from their own IRA—potentially $222,000 combined. Even better, if you’re 73 or older and have to take Required Minimum Distributions (RMDs), a QCD counts toward that requirement. So you satisfy the IRS while supporting a cause you believe in, without adding to your taxable income.
Why does this matter more now? The new tax law created a 0.5% floor on charitable deductions. That means if you itemize, you can only deduct the portion of your charitable gifts that exceeds half a percent of your income. For someone making $200,000, the first $1,000 of giving isn’t deductible at all. QCDs skip right past this limitation because they’re not a deduction—they’re an exclusion from income. The money simply never counts as yours in the first place.
There’s one catch: QCDs can’t go to donor-advised funds or private foundations. They must go directly to a qualified public charity like your church, alma mater, or local food bank.
Donor-Advised Funds: Give Now, Decide Later
A Donor-Advised Fund (DAF) works like a charitable checking account. You contribute cash, stock, or other assets to a sponsoring organization (Fidelity Charitable, Schwab Charitable, and community foundations are popular options). You get an immediate tax deduction in the year you contribute. Then, over time, you recommend grants from your fund to the charities you want to support.
This “deduct now, give later” approach is especially powerful under the new tax rules. Since more people now take the standard deduction (about 86% of taxpayers), many folks don’t get any tax benefit from regular charitable giving. A DAF lets you “bunch” multiple years of giving into one year. Instead of giving $3,000 each year for four years, you could contribute $12,000 to a DAF in one year, push yourself over the standard deduction threshold, and take a meaningful deduction. Then you recommend grants to your charities over the next four years.
DAFs are also a great place to put appreciated stock. If you’ve held shares for more than a year and they’ve gone up in value, donating them directly to your DAF lets you avoid paying capital gains tax on the appreciation while still claiming a deduction for the full market value. It’s one of the few true win-wins in the tax code.
One important note: the new $1,000/$2,000 deduction for non-itemizers (more on that below) doesn’t apply to DAF contributions. If you’re going to use that new deduction, you’ll need to give directly to the charity.
The New Above-the-Line Deduction: Good News for Everyday Givers
Here’s something new for 2026 that might help millions of people who don’t itemize: a deduction of up to $1,000 ($2,000 for married couples filing jointly) for cash donations to charity. This is an “above-the-line” deduction, which means you get it even if you take the standard deduction.
Before this change, only itemizers could deduct charitable gifts. Since the standard deduction is now $16,100 for single filers and $32,200 for couples, most people don’t have enough deductions to itemize. This new rule gives everyone a small incentive to give.
The tax savings aren’t huge—if you’re in the 22% bracket and give $1,000, you’ll save $220—but it’s real money that used to disappear into the IRS. If you’re already giving to your church, community organization, or favorite nonprofit, make sure to track your donations so you can claim this deduction.
Remember: this deduction only covers cash donations to qualified public charities. Contributions to donor-advised funds and private foundations don’t count.
The Bottom Line
Which approach is right for you? It depends on your situation. If you’re over 70½ with IRA assets, QCDs are almost always worth considering. If you have appreciated stock or want to bunch several years of giving into one tax year, a donor-advised fund might be your best bet. And if you’re a regular giver who takes the standard deduction, don’t forget to claim your $1,000 (or $2,000) above-the-line deduction.
The key is to plan ahead. The new tax rules reward people who think strategically about when and how they give. A few hours of planning could mean more money for the causes you care about and less money going to Uncle Sam.
This article is for informational purposes only and does not constitute tax or legal advice. Consult with a qualified tax professional before making decisions about charitable giving strategies.
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge, a Registered Investment Advisor. Sound Foundation Wealth Advisors and Cambridge Investment Research, Inc. are not affiliated. • The information in this email/website/blog is confidential and is intended solely for the addressee.
