Making your giving count: Strategic year-end philanthropy

Aligning charitable impact with tax strategy and family legacy.

Key takeaways

• Year-end giving may support both philanthropic and wealth-planning goals.
• Appreciated assets may offer greater tax efficiency than cash donations.
• Donor-advised funds and charitable trusts can provide flexibility and control.
• Family philanthropy may help strengthen multigenerational legacy planning.
• Early coordination with tax and wealth professionals may help maximize impact.

Year-end is an ideal opportunity for investors and families to focus on tax planning, portfolio reviews, and wealth transfer strategies. Charitable giving can play a meaningful role in these conversations, allowing individuals to support the causes they care about while potentially enhancing tax efficiency and advancing long-term family legacy goals. A thoughtful approach may help maximize both philanthropic impact and financial benefits.

Americans have been benefactors of nonprofit organizations helping address a variety of needs, including support for children in foster care and individuals and families affected by food insecurity, natural disasters, or homelessness. In fact, for the 2025 calendar year charitable donations reached a record high of $617.2 billion according to the Giving USA 2026 Report via Give.org.

Why does year-end charitable giving matter?

Giving Tuesday, designated as a global day of giving each year on the Tuesday following Thanksgiving, began at New York City’s 92nd Street Y to create a day that encourages people to do good. It also serves as a reminder to consider giving to those in need when many people may be in the throes of holiday shopping. Coming on the heels of Black Friday and Cyber Monday was intentional to encourage people to be thankful for what they have and find meaningful ways to give back.

Giving at year end may also present key tax mitigation opportunities before December 31. Year-end giving may reduce your taxable income, mitigate capital gain on appreciated assets, and provide nonprofits with incremental funding before the start of the new year. Philanthropy.org shared a full list of deadlines by gift and payment type, which may vary though the official deadline remains December 31 by 11:59 p.m. local time.

What changes were made to charitable giving in 2026?

The One Big Beautiful Bill Act implemented a few changes to the tax laws related to charitable giving.

Among those changes is the return of limited tax advantages to individuals and couples who do not itemize. The Internal Revenue Service (IRS) allows up to $2,000 for couples ($1,000 for individuals) of cash donations to certain qualified organizations to be deducted.

Separately, taxpayers who itemize their deductions are now subject to a 0.5% AGI floor on charitable contributions. Simply stated, this means that the first 0.5% of your AGI given to charity cannot be deducted. If your total charitable giving does not exceed this 0.5% threshold, your entire charitable deduction for the year is reduced to zero. For example, if your AGI is $100,000, the first $500 of your total charitable gifts for the year isn’t deductible. The remainder, subject to other applicable limits, may be deductible. Additional limitations and exceptions may apply.

With a new year just around the corner, now is a great time to connect generosity to intentional financial planning by building charitable giving into your wealth plan for 2027. This early planning may help better align charitable giving with your broader wealth management objectives.

What are the year-end charitable giving options?

Cash donations

Cash donations may provide for simplicity and more immediate impact, and with the deduction opportunity, it may provide tax benefits depending on an individual’s circumstances. This type of donation is often best suited for straightforward charitable support to the organization of your choice be it an animal welfare charity, international aid foundation, or health services based support for those who may not be able to afford costly treatment.

Qualified charitable distributions (QCDs)

When considering your options for making year-end charitable donations, some individuals may want to explore the benefits of qualified charitable distributions. This direct, tax-free transfer of funds from an Individual Retirement Account (IRA) provider to a qualified charity can serve to meet the Required Minimum Distribution (RMDs) for individuals 73 or older and may offer a tax benefit by reducing taxable income for that year.

Eligible accounts include Traditional IRAs, Rollover IRAs, Inherited IRAs, and inactive SEP or SIMPLE IRAs, while employer-sponsored retirement accounts are not eligible unless they are first rolled over to an IRA. The contribution limit for 2026 is $111,000 per person (indexed for inflation) and you must be 70 ½ years of age or older to be eligible to make a QCD.

Donor-advised funds

A donor-advised fund (DAF) is an account that allows you to make tax-deductible contributions of cash or securities, grow them tax-free, and then select the qualified charities that will receive that money in the future. DAFs may offer an immediate tax deduction with flexibility on where future grants may be directed.

For those seeking to create a legacy of charitable giving while instilling their value of generosity in future generations may consider establishing a donor-advised fund as part of their family philanthropy. A DAF also becomes an efficient option for bunching charitable deductions, as it allows several years of gifts to be consolidated into a single tax year to maximize deductions.

Charitable trusts

Designed to provide income to you or other beneficiaries for a set time before remaining assets are distributed to a charitable organization, charitable remainder trusts (CRTs) are another option for those seeking to marry philanthropic and financial goals. An irrevocable trust, a CRT may allow you to convert highly appreciated assets into an income stream while potentially generating an immediate charitable tax deduction.

Also an irrevocable trust, charitable lead trusts (CLTs) are the reverse of a CRT wherein the charitable organization(s) receive an annual payout with the remaining assets passing to the trustee’s heirs. There are income, estate, and legacy planning considerations with both CRTs and CLTs, so it is important to work with tax and financial/wealth planners strategically to determine what option may be best for your individual goals and objectives.

Private foundations

Another option that may help create and build a family legacy of giving comes in the form of private foundations. This giving vehicle provides for greater control and customization, while potentially being built for educational opportunities for future generations. Private foundations can be more complex and costly to set up and may offer lower deduction limits for tax purposes.

What are the benefits of donating appreciated assets at year-end?

Potentially one of the most powerful giving strategies, appreciated assets, such as securities, may provide some unique tax advantages while possibly maximizing your giving potential. The giving of appreciated assets may help mitigate capital gains taxes while providing the giver with a charitable deduction based on fair market value of the asset. At year-end, this may be part of an overall portfolio rebalancing strategy.

Additional assets to consider may include private business interests, real estate, collectibles or other non-cash assets.

“For example, a long-held stock position that has significantly appreciated may provide more value to both the donor and charity when gifted directly rather than sold first,” said Steven Sommers, Philanthropic Solutions Area Manager at Regions. Donating highly appreciated concentrated stock positions may help reduce portfolio concentration risk while avoiding capital gains taxes that could otherwise result from a sale.

Why include year-end charitable giving in your tax plan?

There are some key year-end considerations when it comes to charitable giving and tax planning. For starters, it is important to understand charitable deduction limits for the current year and the year ahead. Will you be itemizing or taking the standard deduction? This could impact the deductions allowed for charitable donations. Are you looking to bunch multiple years of giving into a single tax year to create deductions to offset a particularly high income or capital gains period?

Charitable planning may be most effective when integrated with broader tax and wealth strategies.

How can year-end charitable giving become part of family philanthropy and building a legacy?

Families may consider utilizing charitable giving to communicate their values with those close to them. When it comes to building a legacy, involving children and grandchildren in grantmaking decisions may create a strong foundation of giving early on. You may even find that creating a multigenerational charitable mission instills financial stewardship through philanthropic aspirations and generosity.

“Families often find that charitable planning creates opportunities for deeper conversations about purpose, responsibility, and legacy,” said Sommers.

Year-end giving is not simply a tax exercise. It may also serve as a powerful tool for values-based wealth management and legacy planning.

What are some common mistakes to avoid with year-end charitable giving?

There are a few potential pitfalls if you wait until year-end to begin your charitable planning. Waiting until late December may not be the most opportune time to begin thinking about your donations for the year. But it may provide a great starting point for the year ahead. That doesn’t mean you shouldn’t still make those donations to the organizations supporting causes that reflect your personal and family values.

If you wait until late December, you may find that donating cash is less impactful when appreciated assets may be more efficient and have more impact. You may also discover that required documentation was not retained during the year. Depending on your age and stage in life, you also may be overlooking beneficiary and estate-planning implications that ample planning may provide an opportunity to uncover. You also risk discovering missed opportunities to coordinate with tax and wealth advisors if you wait until the new year to start figuring out your tax bill that comes due in April.

Year-end giving: a checklist

• Review your charitable goals
• Evaluate your current tax situation
• Assess appreciated assets
• Select giving vehicle(s)
• Complete gifts before deadlines
• Retain documentation

Talk with your wealth advisor about:

• How charitable giving may support your overall financial plan.
• When to consider gifting appreciated securities.
• Whether a donor-advised fund may make sense for your family.
• How philanthropy may be incorporated into your estate plan.
• Opportunities to reduce taxes while increasing charitable impact.
• Involving family members in charitable decisions.

The bottom line

Strategic year-end giving may help affluent individuals and families accomplish more than a charitable donation alone. When integrated with tax planning, investment management, and legacy objectives, philanthropy can become a meaningful expression of personal values while enhancing the overall effectiveness of a wealth plan. Thoughtful planning before year-end may help maximize both the impact of your giving and the benefits to your broader financial strategy.

Tax laws are complex and subject to change. Consult your tax advisor, attorney, and wealth advisor regarding your specific circumstances.

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