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Donating to charity used to be simple. Not anymore. I am reaching out for opinions on the most efficient way to donate in 2026. I have identified several ways to donate but can’t decide on the best approach.
The most direct way is to write a check which would be deductible; $2,000 for a married couple or $1,000 for a single taxpayer who takes the standard deduction. Itemizers can deduct up to 35% of AGI (I think).
The next approach is a Qualified Charitable Deduction (QCD) which allows those of us 70 1/2 or older to have our traditional IRA custodian send the donation directly to a charity. This has two advantages; it reduces your minimum distribution and is not taxable if done properly. The limit is $111,000.
Next is donating appreciated securities directly to a charity or to a Donor Advised Fund. The advantage here is that the appreciation is not taxed.
Please comment on my list. I hope I did not miss anything. But if I did, mention it so we can all benefit from the wisdom of the crowd.
I’ve started to use direct gifts of securities to my alma maters, and will continue to do so. I’ve taken to gifting blocks of shares that have the lowest basis while getting the market value as my deduction. This helps bring incremental tax efficiency to my portfolio and doesn’t require me to build any new “structure” for giving. Simple and effective. But the ratcheting down of the value of deductions for charitable contributions based on income can add a new calculation chore. For example, my state phases deductions out and I have seen that the Federal government will start to do that for 2026 for certain higher income taxpayers.
+1 on using a DAF. I use mine to growth my donated money. I limit gifts to 3% less admin and fund fees. The will and trust are set to move final assets to my DAF administrator, and they have instructions to continue my plan as an endowment (perpetual “DAF”). Donations to the DAF are also helping with tax efficiency – paying less taxes now (still doing roth conversions) and reducing RMDs (future taxes). My brokers advisors have been a big help establishing a plan and showing it’s many benefits.
Would you mind sharing who you use for your DAF? I’ve been interested in using a DAF but the fee’s have prevented me, maybe I’m looking at wrong providers though.
I am a gambler and in 2024 (and 2025) won a couple of jackpots that would have thrown me into a much higher tax bracket. My solution was to create a DAF via Schwab which allowed me to itemize deductions and claim my gambling losses against wins. With one simple move, I saved thousands in taxes and simplified my charitable giving. (Sadly, I do now have to pay IRMAA due to the increase in income). But it was a win/win/win situation.
I have always given 10% of my income to charitable causes. That has continued in retirement. It’s my plan to exhaust the DAF over the period of 3 or 4 years and then switch my RMDs (which start this year) to QCDs.