Charitable giving remains one of the most powerful tools in wealth management. Strategic giving supports the causes clients care about while aligning values, legacy, and tax efficiency. However, the One Big Beautiful Bill Act (OBBBA) reshaped the charitable landscape starting in 2026, and those provisions are now in effect. Here are the giving approaches to keep in mind when building client plans.
1. Cash Gifts
Cash remains the simplest way to give. The 60% AGI deduction limit for cash gifts to public charities is now permanent. A new 0.5% AGI floor applies to itemizers: total qualifying contributions, cash and non-cash combined, must exceed 0.5% of AGI before any of it is deductible. Non-itemizers can now deduct up to $1,000 (single) or $2,000 (married) for cash gifts to public charities, though this deduction excludes donor advised funds and private foundations and is not indexed for inflation.
Pro Tip: Model the 0.5% floor into every giving conversation, not just at year end. A client giving $10,000 on $300,000 AGI only deducts $8,500.
2. Gifting Non-Cash Assets
Donating appreciated securities or real estate lets clients avoid capital gains tax entirely while claiming a full fair market value deduction. Assets must be held over one year. AGI limits are 30% for public charities and 20% for private non-operating foundations, with a five-year carryforward on any excess.
Pro Tip: Non-cash gifts count toward the 0.5% floor alongside cash. Sequence the conversation around total annual giving, not each gift type separately.
3. Donor Advised Funds
A DAF simplifies administration while giving clients flexibility to recommend grants over time. Contributions of cash, securities, real estate, or business interests can qualify for an immediate deduction, and fund growth remains tax-free. Sponsor fees typically run 0.60% to 1.25% annually.
Pro Tip: DAFs are now the primary bunching vehicle. A client who consolidates several years of giving into one DAF contribution clears the 0.5% floor decisively in the funding year, then grants on their own timeline afterward without triggering further floor calculations.
4. Qualified Charitable Distributions
QCDs let IRA owners 70½ and older transfer funds directly to charity, counting toward RMDs without appearing in taxable income. The 2026 limit is $111,000 per person, up from $108,000 in 2025.
Pro Tip: QCDs bypass both the 0.5% floor and the 35% deduction cap entirely, since the money never touches taxable income. For retired clients, this is now the single most efficient giving vehicle available.
5. Charitable Remainder Trusts
A CRT pays income to the donor, or another named beneficiary for a term of years (capped at 20) or for life, with the remainder passing to charity. A CRUT accepts ongoing contributions with payments recalculated annually; a CRAT is funded once with fixed payments. Deductions are limited to 30% of AGI.
Pro Tip: CRTs funded with concentrated, low-basis positions remain attractive for converting a single holding into diversified income while capturing an upfront deduction, now weighed against both the 30% ceiling and the 0.5% floor.
6. Charitable Gift Annuities
A CGA exchanges assets for fixed lifetime payments, with the remainder going to the charity at death. The one-time QCD-funded rollover into a CGA rose to $55,000 for 2026, up from $54,000, and sits inside the overall $111,000 annual QCD ceiling rather than on top of it.
Pro Tip: CGAs work best for clients who want simplicity and predictability over flexibility. Once funded, the payout rate and structure are locked in, so confirm the client is comfortable giving up access to principal before recommending this over a CRT, which offers more structural options.
7. Beneficiary Designations
Naming a charity as beneficiary of an IRA, 401(k), annuity, or life insurance policy bypasses probate and avoids the income tax heirs would otherwise owe on an inherited retirement account.
Pro Tip: This is often more efficient than leaving the same account to heirs directly, since the charity owes no income tax on the distribution.
8. Bequests
Gifts through a will or revocable trust reduce the taxable value of an estate. With the estate and gift tax exemption permanently set a $15 million per individual ($30 million per couple) for 2026, fewer clients face estate tax exposure, which shifts the tax advantage of lifetime giving above bequests for many clients. Encourage clients to notify charities of bequest intentions in advance.
Pro Tip: Review beneficiary language every few years, not just at drafting. Charities merge, rename, or dissolve, and a bequest naming an entity that no longer exists in its original form can end up in litigation or default to the residuary estate instead of the intended cause.
9. Charitable Life Insurance
Policies can be gifted outright or structured to benefit a charity at death, letting a modest premium generate an outsized eventual gift. With the higher exemption now permanent, life insurance functions more as a charitable leverage tool than an estate-tax minimization strategy for most clients.
Pro Tip: The deduction only applies if the charity has both ownership and beneficiary rights to the policy, not just beneficiary designation. A client who names a charity as beneficiary but keeps ownership gets no lifetime income tax deduction, only a potential estate tax benefit. Confirm which structure the client wants before drafting.
10. Charitable Lead Trusts
A CLT pays a charity for a set term, with remaining assets passing to family afterward. A grantor CLT provides an upfront deduction with trust income taxed to the donor; a nongrantor CLT provides no upfront deduction but lets the trust deduct its own annual charitable payments.
Pro Tip: With the permanent higher exemption, CLTs remain best suited to ultra-high-net-worth families well above the $30 million thresholds who want to transfer future appreciation to heirs while supporting charity during the trust term.
11. Private Foundations
Foundations give donors maximum control over grantmaking but come with real overhead: a 1.39% excise tax on investment income, strict self-dealing rules, a mandatory 5% annual distribution requirement, and lower AGI deduction limits than public charities (30%/20% versus 60%/30%).
Pro Tip: For most families, a DAF delivers organized, multi-generational giving without this compliance load. Reserve a private foundation for clients who specifically want the added control.
12. Philanthropic LLCs
An LLC offers maximum flexibility for centralizing a family’s giving, but contributions don’t generate a deduction until the LLC itself makes a gift to a qualified charity.
Pro Tip: This structure suits families whose giving has outgrown a single vehicle, often serving as a coordinating platform alongside a foundation, a DAF, and even a 501(c)(4) social welfare organization for advocacy work.
13. Cryptocurrency Donations
Cryptocurrency donations are becoming increasingly common for both individuals and organizations. The IRS treats cryptocurrency as property, so donors can avoid capital gains tax on appreciated coins while claiming a fair market value deduction, much like appreciated securities.
Pro Tip: Gifts over $5,000 require a qualified appraisal. Exchange-listed values alone don’t satisfy the IRS, and this is a frequently missed step worth flagging early.
14. Trump Account Contributions
Beginning in 2026, charities can contribute to Trump accounts, custodial IRAs for children under 18 that become accessible at 18 for qualifying expenses like education. Starting July 4, 2026, charities can make uniform contributions across designated classes of accounts, such as beneficiaries in a particular state or birth year.
Pro Tip: This is a genuinely new giving mechanism, not a variation on an existing one. Several high-profile philanthropists have already announced contributions. Worth monitoring as guidance develops, especially for clients focused on intergenerational or community giving.
Remember that the most effective strategies go beyond tax savings to help clients articulate values and build a lasting legacy. Advisors should work to:
- Build bunching strategies around DAFs or CRTs to clear the 0.5% floor efficiently in high-giving years
- Help clients draft charitable mission statements to guide decisions over time
- Involve family members to sustain giving across generations
- Confirm target charities can accept complex or illiquid assets before a gift is structured
The OBBBA didn’t make charitable planning simpler. That’s exactly why this is your moment. Every client sitting on appreciated stock, every retiree taking RMDs they don’t need, every family with a giving tradition and no real structure behind it—they need someone to translate this into a plan. That’s you. Don’t wait for year-end to have this conversation.