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It’s a tough time to be a charitable organization – and even tougher to be someone who depends on them.

With inflation hitting us all, families are naturally focused on shoring up their own finances. Charitable giving is likely one of the first items to be cut from the budget.

But if you have the resources and want to help, it’s also a great opportunity. Charitable donations mean more now than in previous years. And strategic giving can help reduce your taxes and those your future heirs might otherwise pay, too.

We’ll introduce some of those strategies below. But first, a quick primer.

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WHAT IS CHARITABLE GIVING?

A charitable gift��is a donation to a qualified 501(c)(3) nonprofit organization in exchange for which you (the giver) don’t receive anything in return. While most people think of donations as “cash,” you can also donate property, investments, real estate and more.

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IS CHARITABLE GIVING ELIGIBLE FOR A TAX DEDUCTION?

It can be! For 2026, you can deduct cash charitable contributions up to 60% and noncash contributions up to 30% of your Adjusted Gross Income.

But to deduct your donations, you’ll first need to decide whether to itemize deductions or not. For a lot of people, itemizing isn’t the best option anymore because the standard deductions are so high. If you’re in the 37% tax bracket, your itemized deductions (including charitable giving) will only save you about 35% in taxes in 2026. And if you do choose to itemize your deductions, there’s a small hurdle – a 0.5% floor – before your charitable gifts count.

If you don’t itemize, you can still deduct cash donations made directly to charities, up to $1,000 if you’re single or $2,000 if you’re married filing jointly.

One other thing to note: From 2025 through 2029, the deductions jumps to $40,000, with a 1% adjustment each year. However, if your income is between $500,000 and $600,000, that cap gradually phases down to $10,000. The beginning of this phaseout is also adjusted by 1% annually.

Even if you don’t usually itemize deductions, all is not lost! Keep reading for strategies that can still make the most of your giving.

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WHAT KINDS OF CAUSES CAN I SUPPORT WITH CHARITABLE GIVING?

You can find nonprofits working on almost anything that’s meaningful to you, at the local, national or global level. For example, many charitable organizations work on providing or supporting:

• Food and housing
• Education and job training
• Mental and physical health
• Animal welfare
• Environmental causes
• Arts
• Disaster relief
• Spiritual guidance and support (for example, churches)

To see if donations to an organization will qualify for the tax deduction, you can use this .

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PULLING OUT YOUR CHECKBOOK? HOLD ON A SEC

If you’ve been inundated with requests for charitable support from dozens of organizations, you’re not alone. Charities know a lot of people make giving decisions during busy times of the year or when inspired by a timely campaign. And many offer matching drives, which is a great way to give more with less.

It’s tempting to spread out your giving to as many organizations as possible. But for a lot of folks, choosing one or two organizations is a way to increase their impact and emotionally connect with a specific cause.

Many organizations run special campaigns – such as “Giving Tuesday,” which is on the Tuesday after Thanksgiving each year – where donors come together to help a cause at once. In the case of Giving Tuesday, they raise billions in a single day.

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REDUCE THE IMPACT OF RMDS WITH QCDS

Without proper planning, the tax impact of required minimum distributions can blindside successful investors. If you plan to make charitable contributions, a qualified charitable distribution could be the answer.

With a QCD, you direct money from your RMD (up to $108,000 for 2025; up to $111,000 for 2026) to a charitable organization instead of receiving it and donating after-tax dollars. QCDs can benefit you if you’re taking RMDs and you:

• Don’t plan to itemize deductions. A QCD isn’t included in your taxable income. No itemization is needed. So, with a QCD, you remove the money from your income – plus you can still take the standard deduction.
• Don’t need the RMD money. While you could take the RMD and then donate that money outside of a QCD, the income would still be counted in your pre-deduction adjusted gross income, and that can affect whether you’re subject to things like higher Medicare premiums or additional kinds of taxes.
• Desire flexibility. You can make an annual charitable gift and have the flexibility to choose a different charity each time.

Special note: The SECURE 2.0 Act pushed back RMD dates, but not QCD dates – so as long as you’re at least age 70.5, you can take a QCD even if you haven’t started RMDs yet. If you fall into this category, note that:

• You can’t include the amount of the QCD as an itemized deduction, so it won’t lower your taxes for that tax year.
• However, it will remove money from your retirement accounts tax-free, which can help reduce the tax burden in future years once you start taking RMDs.
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GET AN IMMEDIATE BANG FOR YOUR BUCK WITH DONOR-ADVISED FUNDS

A donor-advised fund is an account that allows you to make a donation, invest the money and then make grants from the account to your chosen charities over time.

With a DAF, you can make a large contribution and get the full deduction (up to IRS limits) when you file your taxes for that year. Your donation is initially invested by the DAF until you decide where to direct it, which could be years in the future. (Those disbursements of money from the DAF are called “grants,” and while you can choose to recommend grants to any public 501(c)(3) organization, the DAF has to approve them – you no longer own or control the assets.)

A DAF can be a great option if you:

• Plan to make a donation as part of your tax strategy but need more time to decide where you want it to go. This often is the case if you have a year with a lot of income from large capital gains or a home sale, for example.
• Want to grow the amount – and therefore the impact – you’ll ultimately be able to offer your chosen causes. (Growth in a DAF is tax-free.)
• Support many causes and want to simplify your recordkeeping. With a DAF, you have one contribution to report but can choose a different charity to grant to each time.
• Have noncash assets you want to donate to a charitable organization that can’t accept them. DAFs can accept gifts of stocks, mutual fund shares, real estate and more.
• Don’t normally donate enough to make itemizing deductions worth it. If you have the ability, you could make one large donation to get the write-off and then spread out your grants over several years.

“I’ve had clients who normally give $2,000 to charities every year instead make a $10,000 donation to a DAF,” says Director of Estate Planning Rodney Weaver. “Then, over the next several years, they’ll grant money out of the DAF to the charities that they would normally give to. By pulling their charitable donations forward into one year, they’re able to itemize all their deductions – charitable donations, mortgage interest, property taxes, state and local income taxes – which together might be larger than the standard deduction.”��

Here are some things you’ll want to remember with a DAF:

• A DAF charges fees, so you’ll want to make sure it makes sense for you before you move ahead.
• You can’t combine these strategies and direct a QCD to a DAF.
• You deduct DAF contributions when you fund the DAF. You can’t deduct the grants later on, too.
• If you establish a DAF, you should name a beneficiary who can continue to honor your wishes for the money if needed.

Donations are irreversible, so make sure you’ve considered all the angles. Wondering if a QCD or DAF would be better for you? 91���� Engines advisors can help make sure you’re using the right strategies for your situation.

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ALIGNING HEAD AND HEART

We know you don’t give to charity simply for a tax deduction. For many clients, giving is the fulfillment of a lifetime of effort – a way to leave a lasting impact on the world.

By being strategic, you can increase the impact you’re able to have and get other benefits, too. A financial advisor can help you explore ways to maximize your charitable donations for this year or as part of your overall integrated wealth management plan.