With a belly full of turkey and the holiday season kicking into high gear, the end of the year is a great time to reflect on your charitable intentions and desires. It’s particularly important this year, as the One Big Beautiful Bill Act (OBBBA) made significant changes to charitable donations, which will go into effect in 2026.

While I’ll spend most of this note talking about best practices with charitable giving, I want to emphasize this point:

The primary motivation for giving should be to positively impact organizations and communities that you care deeply about. We are fortunate to work with many generous people at Greenway, and can attest to the fact that generous giving also positively impacts the giver.

With the motivation for giving established, let’s look at how to make your charitable giving more impactful. 

1- Make informed decisions about where you donate your gifts. Researching organizations to support is a great place to start! Charity Navigator is a great resource; they evaluate thousands of US-based nonprofits on four metrics (Accountability & Finance, Impact & Results, Leadership & Adaptability, and Culture & Community) and assign a star rating. You can filter for causes or search for organizations to be confident that your dollars will be used wisely, and in-line with your values. Some of the best organizations to support are ones that you can actively get involved with, giving both time and money. Look for volunteer opportunities in your community for causes you care about!

2- Consider ways to make your giving more tax efficient. For people who are already generous, implementing strategies to make giving tax efficient can allow for bigger gifts and more impact. Some strategies to consider:

• Using a Donor Advised Fund (“DAF”) to streamline charitable giving. Contributions to a DAF are tax deductible in the year that they are given, even if you grant them out later. In addition, DAFs make it easy to donate long-term appreciated assets (like stocks and bonds in a brokerage account).
• Gifting long-term appreciated shares. Not all donations are equal. Let’s say you intend to make a $10k charitable contribution, and you hold $10k of an investment with long-term capital gains of $4k. If you sell your investment to free up cash, you’ll owe capital gains taxes on the $4k of gains. Alternatively, you can contribute the appreciated shares to a DAF or a charitable organization, and avoid paying any capital gains taxes. Assuming you’re in the 15% capital gains bucket, you’d save $600 in taxes by contributing shares instead of cash.  
• Charitable bunching. Does your giving push you near or over the standard deduction? If so, you may want to consider charitable bunching. In a nutshell, charitable bunching is a strategy where you group multiple years of charitable gifts into one taxable year. In years when you “bunch” donations, you then itemize deductions. In the other years, you’ll take the standard deduction. This strategy can maximize tax benefits over multiple years.
• Using qualified accounts (such as IRAs) to make Qualified Charitable Distributions (QCDs). If you are over 70 ½ years old, using an IRA to make QCDs can be a really powerful and tax-efficient way to fund your charitable contributions. QCDs are excluded from your gross income for the year, which means you get the full tax benefit for your gift. For those who’ve reached the Required Minimum Distribution age, QCDs also satisfy your RMD. QCDs are currently limited to $108k per individual, and must be made directly to charities (i.e. not to DAFs). 

It’s worth nothing that the IRS has charitable deduction limits in place. These limits vary based on the type of organization you support and the type of contribution made. For example, cash donations to public charities (including DAFs) are limited to 60% of AGI. Gifts of appreciated shares to public charities (including DAFs) are limited to 30% of AGI. 

3- Prepare for tax law changes in 2026

The One Big Beautiful Bill Act, signed into law in July 2025, introduced several significant changes related to charitable giving. These changes will take effect in 2026. For some tax payers, these changes may influence whether it would be beneficial to accelerate giving in 2025. Some of the main changes:

• For tax payers who take the standard deduction, there is now a Universal Charitable Deduction of $1,000 (filing single) or $2,000 (filing joint). It’s important to note that this deduction only applies to cash gifts, not gifts to DAFs.
• For tax payers who itemize deductions, charitable deductions are only allowed to the extent they exceed 0.5% of Adjusted Gross Income. Let’s consider Sally, who has an AGI of $100,000. If she donates $1,500 to her favorite local charity, she cannot deduct the first $500 (0.5% of $100k AGI = $500). As a result, her deduction is limited to $1,000.
• High-income taxpayers who itemize deductions will have a 2/37 haircut on their charitable deductions (and other itemized deductions). For tax payers in the 37% marginal bracket, $2 of every $37 deduction will be disallowed, effectively capping the deduction at 35%. Let’s consider Jolene and Harry, a married couple with an AGI of $1MM. They plan to give $100k to charitable organizations in 2026. The first $5,000 of their gift is not deductible (0.5% of AGI). The remaining $95k gift can be itemized, but will be subject to a 35% cap vs. 37% in prior years. 

We are grateful to work with people who are willing and able to be generous, and know that our communities and world are better off as a result. If you’d like to speak with an advisor about your specific situation, we’d be happy to collaborate with you.