Charitable Giving Done Right: How to Give Moreand Pay Less in Taxes
The Bunching Strategy
Most people who give to charity do it the same way every year: they write a check, they get a receipt, and maybe they remember to list it on their taxes. There's nothing wrong with that — but there's a smarter way. The standard deduction in 2026 is $32,200 for married filers. If your total itemized deductions — including charitable gifts — don't exceed that number, you're effectively getting no tax benefit from your donations. They're invisible. The fix: bunch two or three years of charitable gifts into a single year, exceed the standard deduction threshold by a wide margin, and itemize that year. In the other years, take the standard deduction. You give the same total amount over time, but you concentrate the deductions where they actually create tax value.
Donor-Advised Funds (DAFs)
A Donor-Advised Fund is the tool that makes bunching work elegantly. You contribute a large amount to the DAF in one year, take the full deduction immediately, and then distribute the grants to your actual charities over multiple years on your own timeline. The IRS doesn't care when the money leaves the DAF — you get the deduction when it goes in. Keep in mind: under the 2026 OBBBA rules, itemized charitable deductions are only fully allowed above a 0.5% of AGI floor, and the maximum tax benefit for high earners is capped at 35 cents on the dollar. The DAF strategy becomes even more powerful when paired with bunching to clear both the standard deduction and AGI floor in a single year.
The Appreciated Asset Play
Never give cash to charity if you have appreciated stock. If you own stock worth $10,000 that you bought for $2,000, and you sell it to give the proceeds to charity, you first pay capital gains tax on $8,000, then give the after-tax amount. Instead, donate the stock directly. You avoid the capital gains entirely and deduct the full $10,000 fair market value. The charity sells it tax-free. Everyone wins except the IRS.
Qualified Charitable Distributions (QCDs)
If you're 70½ or older, you can give directly from your IRA to a charity — up to $111,000 per year in 2026 (up from $108,000 in 2025) — and it counts toward your Required Minimum Distribution without appearing as taxable income. For retirees with RMDs they don't need, this is now the single most efficient charitable move available. Under the new 2026 OBBBA rules, QCDs bypass both the 0.5% AGI floor on itemized deductions and the 35% cap on high-earner deductions entirely, making them more valuable than a cash gift for most retirees.
Disclosure
Raymond James and its advisors do not offer tax or legal advice. Please consult the appropriate professional. Alternative investments involve specific risks that may be greater than those associated with traditional investments. The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jim Maddux and not necessarily those of Raymond James.
