Giving Smarter: A Guide to Charitable Giving Strategies for Nonprofits and Donors

Takeaways

• Donating appreciated stock directly to a charity or donor-advised fund may let you avoid recognizing the embedded capital gain. Still, you generally must transfer the shares before you sell them.
• Starting in 2026, itemizers get no deduction for the first 0.5% of AGI given to charity each year, so bunching several years of gifts into one donor-advised fund contribution can help clear the new floor.
• Donors age 70½ and older can send up to $111,000 per person from an IRA directly to charity as a qualified charitable distribution (QCD), which can count toward a required minimum distribution.
• Giving tied to a business sale or other liquidity event generally needs to be planned before the deal becomes substantially certain or legally binding.
• Giving decisions work best when your tax strategy and your investment plan are built together, so each gift is funded and timed with your full financial picture in view.

Most conversations about giving focus on why someone should give. How the gift is made gets far less attention, and it can matter as much as the gift itself. Donors often give the way that is easiest for them, and nonprofits can miss larger, better-timed gifts without ever knowing it.

Charitable giving strategies such as donating appreciated stock, donor-advised funds, and qualified charitable distributions change how a gift is taxed and when it arrives. This guide covers eight of them, includes the 2026 numbers that shifted under the One Big Beautiful Bill Act, and shows how each fits into a broader plan built around what matters most to you.

Brighton Jones doesn’t provide individualized tax or legal advice, and nothing here is a specific recommendation for your situation. Understanding this landscape can help nonprofits hold more informed donor conversations and help donors bring sharper questions to their own advisors.

Our full guide includes a fuller operational checklist for nonprofits, with gift acceptance policies and stock-gift notification forms. Download the full guide. 

Who benefits from these charitable giving strategies

If you work with or lead a nonprofit: you don’t need to become a tax expert. Recognizing when a donor’s situation might call for one of these strategies may help donors evaluate the timing and form of potential gifts.

If you’re a donor: these strategies may help you support the causes you care about while reducing taxes or avoiding capital gains. You can change how you give and keep the amount the same.

2026 charitable giving numbers at a glance

Tax rules around charitable giving changed for 2026 under the One Big Beautiful Bill Act, so older figures may no longer apply. As of this update:

• Standard deduction: $16,100 (single), $32,200 (married filing jointly)
• Qualified Charitable Distribution (QCD) limit: $111,000 per person, age 70½ and older
• Non-itemizer charitable deduction: up to $1,000 (single) or $2,000 (married filing jointly) for cash gifts, new for 2026, even if you take the standard deduction
• New 0.5% AGI floor: itemizers can no longer deduct the first 0.5% of their adjusted gross income given to charity each year
• Cash gift deduction limit: 60% of AGI for gifts to public charities, now permanent
• Appreciated stock deduction limit: generally 30% of AGI for gifts to public charities, with a five-year carryforward for anything above that

(Source: IRS, 2026 tax inflation adjustments; Congressional Research Service on QCDs. Figures adjust periodically.)

Eight charitable giving strategies and who they fit

Each of the eight charitable giving strategies below starts with a plain-terms summary, then covers who it often fits and what to watch for.

1. Donate appreciated stock directly to charity

The donor may avoid recognizing the embedded capital gain, subject to applicable tax rules and limitations, and a qualifying charity can generally sell donated publicly traded securities without recognizing gain. A qualifying tax-exempt charity can generally sell donated publicly traded securities without recognizing capital gain, although the donor’s treatment depends on the property, holding period, recipient, and applicable requirements.

Hypothetical example, for illustration only: stock bought for $10,000 is now worth $50,000. Selling first could trigger tax on part of the $40,000 gain. Donating the shares directly may avoid recognizing the embedded gain, while any charitable deduction is subject to applicable AGI limits, valuation rules, and carryforward provisions.

The transfer generally has to happen before a sale, so raise it with an advisor ahead of time.

2. Donor-Advised Funds (DAFs): Give now, decide later

A donor-advised fund works like a charitable savings account. In plain terms, the donor contributes money or investments, which may be eligible for a tax deduction that year (subject to applicable tax rules and limitations), and later recommends grants to specific charities, whether that’s next month or over the next decade.

DAFs often fit donors who support several organizations and want flexibility on grant timing. They also suit high-income years and gifts of appreciated investments. Some donors choose a sponsor that invests in line with their values.

Two things to know: DAF contributions don’t qualify for the new $1,000/$2,000 non-itemizer deduction, and they are irrevocable. The donor may keep advisory and granting privileges, but contributions are irrevocable, and the sponsoring organization legally controls the assets.

Thinking through charitable giving strategies? Let’s talk about your complete financial picture. Schedule a complimentary intro call.

3. Bunching charitable donations to clear the 2026 threshold

Most taxpayers take the standard deduction, so giving the same amount every year often produces no added tax benefit. Starting in 2026, a new 0.5% AGI floor means the first slice of each year’s giving generates no deduction, even for itemizers.

Hypothetical example, for illustration only: instead of giving $10,000 a year for five years, a donor contributes $50,000 to a donor-advised fund in one year. That is more likely to clear both the standard deduction and the new floor that year, depending on the donor’s AGI, filing status, and other itemized deductions; bunching may make it more likely that charitable contributions produce an incremental deduction.

Bunching often fits a year with a large bonus or a business sale. It changes when gifts are made and how they are taxed, and the causes a donor supports stay the same.

4. Giving before a business sale or other major liquidity event

A donor selling a business or exercising stock options is often in a higher tax bracket than usual, which can make a charitable deduction more valuable that year (subject to applicable rules and limitations). Contributing assets to a donor-advised fund before the transaction closes may increase the potential value of an available charitable deduction, depending on the donor’s circumstances.

Timing matters most. This planning generally has to happen before a sale is locked in, so the conversation should start months ahead. Donors should involve qualified tax and legal counsel before the transaction is substantially certain or legally binding, because assignment-of-income principles may limit the intended tax treatment. See our overview of business exit planning for the broader picture.

5. Donating concentrated stock: Turning risk into impact

Some donors hold a large share of their wealth in a single company’s stock, often from founder’s shares, restricted stock units (RSUs), or from years of appreciation. That concentration creates financial risk and a future tax bill if the donor ever sells.

A donor can give some of those shares directly to a charity or donor-advised fund. This works like the appreciated-stock approach above and aims to reduce an oversized concentrated stock position, which may be part of a broader diversification strategy.

Potential benefits include avoiding capital gains tax on the shares given and a charitable deduction, subject to the same 30%-of-AGI limit. The gift also shrinks the position and lets a donor support a cause without touching cash reserves.

6. Giving private business interests

Some of the most significant charitable gifts come from a piece of a privately held business rather than cash or public stock, since business owners often have most of their net worth tied up in the company itself. In the right situation, an owner may be able to contribute a portion of their ownership stake to a charitable vehicle before a sale, potentially generating a charitable deduction, reducing the taxable gain tied to that portion of the business, and allowing a significant gift without using cash.

Worth being candid about: these transactions are highly technical and often take months to structure. Attorneys and tax professionals need to coordinate with valuation specialists and your financial advisor well before a sale is finalized.

7. Qualified Charitable Distributions (QCDs): A retiree’s giving tool

For donors age 70½ or older, a qualified charitable distribution can be an efficient way to give. In plain terms, a QCD lets a donor send money directly from an IRA to a qualified charity. The IRA generally reports the distribution. Still, if all QCD requirements are satisfied, the qualifying amount is excluded from taxable income, so the gift can effectively bypass the donor’s tax return. The donor does not claim a separate charitable deduction.

Excluding a qualifying QCD from income may affect AGI-based items, including Medicare premium surcharges and the taxable portion of Social Security benefits, depending on the donor’s circumstances.’

For 2026, up to $111,000 per person qualifies (up from $108,000 in 2025), and each spouse with an IRA has their own limit.

8. Charitable Remainder Trusts (CRTs): Giving while keeping income

For donors with a highly appreciated asset, such as stock, real estate, or a business interest, a charitable remainder trust lets them give and receive income from the same asset. A donor transfers the asset into a trust, which can often sell it without triggering an immediate capital gains bill. However, the income recipient may recognize taxable gain as distributions are made. The donor receives income for life or a set number of years, and the remainder eventually goes to charity. A CRT may defer rather than eliminate recognition of gain, although taxable gain may be recognized by the income recipient as distributions are made.

CRTs often appeal to donors who want to diversify gradually out of a concentrated position. A Charitable Remainder Annuity Trust (CRAT) pays a fixed dollar amount each year, and a Charitable Remainder Unitrust (CRUT) pays a fixed percentage of the trust’s value.

CRTs carry real legal, tax, and setup costs and are irrevocable, so they often make the most sense for larger gifts. Donors should work closely with qualified professionals before setting one up.

Our full guide includes a fuller operational checklist for nonprofits, with gift acceptance policies and stock-gift notification forms. Download the full guide. 

What nonprofits can do to encourage better-timed gifts

Nonprofits aren’t expected to be tax advisors, and shouldn’t try to be. A few steps carry the most weight:

• Accept stock gifts as well as cash and checks. Post transfer instructions where a donor’s advisor can find them.
• Learn how DAF grants show up. They arrive as a check or wire from the sponsoring organization, often without the donor’s name. Send a standard thank-you. The donor already took the deduction when funding the DAF, so a tax-deduction letter generally doesn’t apply.
• Listen for the cues. “I just sold my company” and “I’m turning 70 this year” are natural openings to suggest the donor loop in their financial advisor.
• Consider a DAF-giving widget for your website, so donors can recommend a grant without leaving your site.

Our full guide includes a fuller operational checklist for nonprofits, with gift acceptance policies and stock-gift notification forms. Download the full guide. 

Charitable giving within your complete financial picture

A gift is both a financial decision and a values decision, and the tax mechanics follow from a prior question: what do you want your giving to accomplish? The strategy that works on paper still has to fit the rest of your life, including what else you’re trying to fund.

That is why charitable giving strategies work better when the decisions are coordinated. Coordinating these decisions can help you spot interactions among taxes, liquidity, portfolio concentration, and charitable goals. A DAF contribution shifts your tax picture for the year, while donating stock reshapes your portfolio. Made separately, each move can undercut the other. Brighton Jones’ Personal CFO model puts tax strategy, investment management, and philanthropic advising on one team, so a gift is planned alongside everything else on your balance sheet.

Questions to ask before you give

These questions can help you decide which charitable giving strategies to raise with your advisor:

• Do you usually take the standard deduction? Bunching may be worth modeling.
• Are you 70½ or older with an IRA? A QCD may fit.
• Do you hold stock or funds that have grown a lot? Giving shares directly may be worth a look.
• Is a business sale or an unusually high-income year ahead? Planning before a deal is substantially certain generally matters most.
• Do you want income from an asset you also plan to give away? A charitable remainder trust may be relevant.

Giving smarter, together

Nonprofits: you don’t need all the answers. Knowing these charitable giving strategies exist and recognizing the cues can be enough to open the door to a bigger or better-timed gift. Donors: if any of this sounds relevant, raise it with your financial advisor or tax professional before you give.

Our full guide includes a fuller operational checklist for nonprofits, with gift acceptance policies and stock-gift notification forms. Download the full guide. 

Frequently asked questions

What is a donor-advised fund (DAF)?

A charitable account you contribute to may be eligible for a charitable deduction in the contribution year, subject to applicable requirements and limitations.

How does a qualified charitable distribution (QCD) work?

If you’re 70½ or older, you can direct your IRA custodian to send money straight to a qualified charity. If you meet all QCD requirements, the qualifying amount is excluded from gross income and may count toward the year’s required minimum distribution.

Can I donate stock directly to a nonprofit instead of cash?

Yes. Many nonprofits can accept publicly traded stock, but capabilities and gift-acceptance policies vary. Confirm transfer instructions with the organization before initiating the gift. If they don’t post transfer instructions, ask their finance team or contact a community foundation that can receive it on your behalf.

What are the charitable deduction limits for 2026?

Cash gifts to public charities are generally deductible up to 60% of your AGI, and gifts of appreciated stock up to 30%, both after a new 0.5% AGI floor introduced by the OBBBA. Consult your tax advisor for how these apply to your specific situation.

Do I need to itemize to get a tax benefit for giving?

Not entirely. Starting in 2026, non-itemizers can deduct up to $1,000 (single) or $2,000 (married filing jointly) for cash gifts, even if they take the standard deduction.

Does a donor-advised fund grant come with a new tax deduction?

No. The donor gets the deduction when they contribute to the DAF, not when the DAF grants money to a charity. Nonprofits should send a thank-you, not a tax-deduction letter, for DAF grants.

What’s the difference between a CRAT and a CRUT?

A Charitable Remainder Annuity Trust (CRAT) pays a fixed dollar amount each year. A Charitable Remainder Unitrust (CRUT) pays a fixed percentage of the trust’s value, recalculated annually, and generally allows additional contributions over time.

Is bunching charitable donations still worth it in 2026?

Often more so than before. The new 0.5% AGI floor makes it harder for smaller, spread-out gifts to generate any deduction, so combining several years of giving into one, often through a donor-advised fund, may be more tax-efficientdepending on the donor’s AGI, filing status, other itemized deductions, timing, and charitable objectives.

About the Author: Brian Hickox is a Lead Advisor at Brighton Jones, where he serves as a Personal CFO to clients, helping them align their financial strategy with the goals and values that matter most. He has served on the boards of several nonprofit organizations and brings a firsthand view of how giving strategies affect both donors and the causes they support.

Disclosure: This material is provided for general educational and informational purposes only and does not constitute individualized investment, tax, or legal advice. Brighton Jones does not provide tax or legal advice; please consult your own qualified tax advisor or attorney regarding your specific situation before pursuing any strategy described here. Figures cited reflect federal tax rules for the 2026 tax year, are subject to change, and may not reflect state-specific rules; consult IRS.gov or your tax advisor for current details. Examples are hypothetical and for illustrative purposes only; actual results will vary based on individual circumstances and are not guaranteed. References to third-party organizations, products, or platforms are for informational purposes only and do not constitute an endorsement; Brighton Jones is not affiliated with, and does not receive compensation from, any organization named in this article. Brighton Jones LLC (“Brighton Jones”) is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. This material is not a solicitation or offer to buy or sell any security. CFP® and Certified Financial Planner® are certification marks owned by the Certified Financial Planner Board of Standards, Inc.