The best way to give depends on what you own and how old you are. If you itemize, give appreciated stock held more than a year: you generally deduct its market value and never pay tax on the gain. If your giving alone doesn’t clear the 2026 standard deduction of $32,200 for a married couple ($16,100 single), put two or three years of gifts into a donor-advised fund in one year and take the standard deduction in the others. From age 70½, a qualified charitable distribution from your IRA of up to $111,000 in 2026 stays out of your taxable income altogether and counts toward your required distribution.
The glossary has short definitions of a donor-advised fund and a QCD. This guide covers how to choose between them, and the 2026 rule changes that shift the math.
What changed for 2026
Three changes from the July 2025 tax law apply from the 2026 tax year:
- A deduction without itemizing. You can deduct up to $1,000 of cash gifts ($2,000 joint) even on the standard deduction. It covers cash to operating charities only, not stock, and not gifts to donor-advised funds or supporting organizations.
- A 0.5% floor for itemizers. Only gifts above 0.5% of your adjusted gross income count. With income of $300,000, the first $1,500 you give isn’t deductible.
- A cap for the top bracket. If your taxable income reaches the 37% bracket ($768,700 joint, $640,600 single), itemized deductions are trimmed so each dollar is worth about 35 cents instead of 37.
The older limits still apply: cash gifts to public charities can be deducted up to 60% of income, appreciated stock up to 30%, and anything over the limit carries forward for five years.
The three tools side by side
| Appreciated stock | Donor-advised fund | QCD from an IRA | |
|---|---|---|---|
| Who can use it | Anyone who itemizes | Anyone; the deduction needs itemizing | IRA owners 70½ or older |
| Tax effect | Deduct market value, no tax on the gain | Deduction in the year you contribute | Left out of income; counts toward your RMD |
| 2026 limit | 30% of income | 60% for cash, 30% for stock | $111,000 per person |
| Need to itemize? | Yes | Yes | No |
| Gift goes to | The charity | Your fund, then charities over time | The charity, directly |
You can combine them. A retiree might make regular gifts by QCD and put appreciated stock into a donor-advised fund in a year with unusually high income.
Appreciated stock: give the winners, sell the losers
Shares held more than one year that have risen generally give you a deduction for their full market value, and neither you nor the charity owes tax on the gain. Shares held a year or less only get a deduction for what you paid.
Two refinements. First, give the lots with the biggest gains, then, if you still want to own the stock, buy it back with the cash you would have given; you reset your cost basis higher. Second, never donate shares that have lost value. Sell them, claim the loss (see tax-loss harvesting), and give the cash.
Publicly traded stock doesn’t need an appraisal, but noncash gifts over $500 in a year go on Form 8283.
Donor-advised funds and bunching
A donor-advised fund lets you take the deduction now and choose charities later. The math works through bunching. Take a married couple with $300,000 of income, $20,000 of state taxes and mortgage interest, and $15,000 of giving a year:
Giving each year, they itemize $33,500 a year (after the $1,500 floor), only $1,300 more than the standard deduction. Bunching three years into the fund, they itemize $63,500 once and take $32,200 in each of the next two years. That’s $27,400 more in deductions over three years, about $6,576 less federal tax in the 24% bracket. The fund then sends $15,000 a year to the same charities. In the standard-deduction years they can still deduct up to $2,000 of cash given straight to charities.
What to know before opening one: the contribution is irrevocable, the sponsor legally controls the money, grants can’t buy you anything (event tickets or memberships), and sponsors charge an administrative fee on top of the funds’ costs, published on each sponsor’s site.
QCDs: the best tool after 70½
A QCD is paid by your IRA custodian directly to a charity. It never enters your adjusted gross income, which is better than a deduction: it helps even if you take the standard deduction, and lower income can keep Medicare premiums and the tax on Social Security down. For 2026 each IRA owner can give up to $111,000 this way, and it counts toward the required minimum distribution that starts at 73.
The rules are strict. You must be 70½ on the day it’s paid. It can’t go to a donor-advised fund or a supporting organization. You need the charity’s written acknowledgment. And deductible IRA contributions you made after 70½ reduce the amount you can exclude.
Common mistakes
- Taking the RMD first. The first dollars out of an IRA count toward the year’s required amount. If you withdraw your full RMD in January, a QCD in December can’t make it tax-free.
- Writing a check from the IRA money. If the distribution is paid to you and you then give it away, it’s taxable income, not a QCD.
- Not telling your tax preparer. Form 1099-R doesn’t mark a distribution as a QCD.
- Donating cash while holding appreciated stock. You pay the gain later for no reason.
- Bunching without checking the floor and the 30% limit. A large stock gift in a lower-income year can exceed the limit and spill into carryover.
- Paying an advisor a percentage fee on the donor-advised fund. Ask whether those assets are in the balance they bill on.
Questions to ask an advisor
- Which holdings should I give, and which lots, given my basis?
- Does bunching beat giving every year for me, with the 2026 floor and my bracket?
- Should my giving after 70½ come from QCDs, and how does that change my Roth conversion plan?
- How would a donor-advised fund or a charitable trust fit my estate plan?
- Do you charge on donor-advised fund assets, and are you paid by any fund sponsor?
When a fee-only advisor is worth it, and what it costs
Small, regular cash gifts don’t need a planner. Advice pays when gifts are large, assets have big gains, or giving touches other decisions: a sale of a business or concentrated stock, a high-income year, Roth conversions and Medicare premiums in retirement (see financial advisor for retirement), or an estate plan with a revocable living trust or gifts to the next generation.
Among fee-only firms that publish prices, a one-time plan has a median of $2,000 (middle half $845 to $3,600), hourly advice is $300 an hour, and ongoing planning is $4,500 a year. A single giving strategy fits a few paid hours. In the bunching example above, the tax saved over three years is more than a median one-time plan. See what a one-time financial plan costs and hourly planner costs.
To find advisors who do this work, browse advisors for retirees and family wealth transfer specialists, the estate planning and tax planning specialties, or the retirees and multi-generational families pages. The year-end tax planning checklist has the December deadlines for gifts and QCDs.