Many families who give generously do it for reasons that have nothing to do with taxes. They support a university that shaped them, a congregation that sustains them, a cause that became personal after it touched someone they love. Often the desire to give comes first and the mechanics follow, though not always. Sometimes a particular asset or account is the intended source from the beginning. Either way, once the decision to give takes shape, how the gift is made matters as much as the amount, because the structure of a gift affects both what it costs you and what the cause ultimately receives.
This is where a surprising amount of value is either captured or lost. Two families can write checks for the same amount to the same charity and end up in very different places, because one gave cash from a bank account and the other gave appreciated stock, funded a donor-advised fund, or routed the gift straight from an IRA. The charity receives the same dollars either way. What differs is the tax cost of getting those dollars there, and that difference, the tax you did not have to pay, is money that can stay with your family or go toward the next gift.
Lead With Purpose, Then Choose the Vehicle
At New Capital Management, charitable planning follows the same order as the rest of the plan. We start with intent: what you want your giving to accomplish, this year and over your lifetime. Those answers shape which tools fit, because the vehicles below are not interchangeable. For couples, this is often where the conversation gets richer, as one spouse may care deeply about a particular organization while the other wants to give more broadly or involve the next generation.
Give Appreciated Securities, Not Cash
The most common missed opportunity we see is families giving cash while holding highly appreciated investments in a taxable account. When you donate a publicly traded security held longer than a year, and give it directly rather than selling first, you generally deduct its full fair market value and avoid the capital gains tax a sale would have triggered. A stock that has tripled in value carries an embedded tax bill that giving the shares directly eliminates. The ceilings differ by gift type: cash to public charities is deductible up to 60 percent of adjusted gross income, long-term appreciated securities up to 30 percent, with any excess carried forward for five years.
What Is a Donor-Advised Fund, and How Does It Work?
A donor-advised fund separates two decisions that usually happen together: when you take the deduction and when the money reaches the charity. You contribute to the fund, deduct the gift that year, then recommend grants to your chosen charities over time. The assets can be invested in the meantime, and you can fund the account with appreciated securities, layering the capital gains advantage onto the fund’s flexibility. It solves real problems for families who give at this level:
Capture a deduction in a high-income year, such as a business sale or a large equity event, while deciding later where the grants should go.
Give anonymously when you prefer to.
Build a lasting structure for family giving, one that can involve your children, without the weight of a private foundation.
The Case for Bunching, and Why It Matters More in 2026
Bunching means concentrating several years of planned giving into a single tax year rather than spreading equal amounts across each one. It lets you itemize in the year you give and take the standard deduction in the off years, capturing more total deduction over time than steady annual giving would. A donor-advised fund makes it practical: you move several years of giving into the fund at once, take the larger deduction, and still grant the money out on your normal rhythm. The charities notice no change. Your tax return does.
This matters more this year, because the rules changed. Beginning in 2026, itemizers can deduct charitable gifts only to the extent they exceed 0.5 percent of adjusted gross income, and for top-bracket taxpayers the benefit of itemized deductions is capped at 35 percent. Smaller annual gifts now clear a higher bar before producing any deduction, which makes concentrating them into fewer, larger years one of the cleaner ways to work with the floor rather than against it.
How Does a Qualified Charitable Distribution Lower Your Taxes?
For clients taking required distributions, the qualified charitable distribution is often the most tax-efficient gift available. If you are 70½ or older, you can send money straight from your IRA to a qualified charity, and the mechanics are what make it work:
You can direct up to $111,000 in 2026, and the amount is excluded from your taxable income rather than claimed as a deduction.
Once you reach your required minimum distribution age, the gift counts toward satisfying that year’s RMD.
Because it lowers your adjusted gross income, it can ease the taxation of Social Security benefits and help hold down Medicare premium surcharges.
The transfer must go directly from the IRA custodian to the charity, and donor-advised funds are not eligible recipients.
A one-time election also allows up to $55,000 to fund certain charitable trusts or gift annuities.
Charitable Remainder Trusts: Income Now, Impact Later
A charitable remainder trust fits a specific situation: you hold an appreciated asset, often concentrated stock or real estate, that you want to give eventually but still want income from now. You move the asset into an irrevocable trust, which can sell it without triggering immediate capital gains, and the trust pays income back to you or another beneficiary for life or a set term. Whatever remains goes to the charity you named, and you take a partial deduction up front.
These trusts carry real complexity and cost and are not for everyone, but for a family holding a low-basis position they want to diversify without a large immediate tax bill, a trust turns a single asset into both a lifetime income stream and a future gift. They also appeal to families who have already provided for the next generation, for whom a charitable remainder can stand in for a traditional inheritance.
Where Giving Fits in the Larger Plan
None of these strategies lives on its own. A qualified charitable distribution changes your taxable income, which affects your Medicare premiums and your room for Roth conversions. The value comes from coordination, the same principle behind the coordinated retirement income strategy we have written about before: the goal is never to optimize one decision in isolation, but to see how each supports the rest.
Before the Calendar Runs Out
Year-end carries a deadline that does not move, but the families who get the most from their giving treat it as the last step of a year-round plan rather than a December scramble. Gifts of appreciated securities take time to transfer, donor-advised funds take time to open and fund, and trusts take longer still, so the most effective giving usually starts months before the deadline. If giving is part of your year, we would welcome the chance to help you structure it so that it goes as far as it can. You can learn more on our charitable giving page, or reach out to start the conversation.