EP Wealth covers charitable giving strategies that may help donors with significant assets give more effectively while managing their tax exposure across their broader financial plan.
Charitable giving at higher wealth levels involves decisions not only about what to give, but how to structure the gift, and when to make it. Each of those choices can affect both the impact of the contribution and the tax outcome.
For donors with sizable portfolios, the assets themselves often create the opportunity. Appreciated stock, large IRA balances, real estate, and private business interests can each be used as charitable giving vehicles, and in some cases they may be more effective to donate than cash.
Strategies that may help donors give more effectively include:
The right approach may depend on your financial situation and how giving fits within your overall plan. A financial advisor can help evaluate which strategies apply to your circumstances.
Before deciding how to structure your giving, it helps to be clear about where you want your contributions to go and why.
For some donors, this means supporting causes connected to personal experience—a medical condition that affected a family member, an educational institution, or a community organization. Others may evaluate charities based on how effectively they deploy donated funds. Resources like Charity Navigator and GuideStar can provide transparency into an organization's financials and program outcomes.
Involving family members in giving decisions can help align contributions with shared priorities across generations, particularly when donor-advised funds or family foundations are part of the picture. Aligning your giving with causes that matter to you and your family is the starting point that the charitable giving strategies below build on.
The OBBBA introduced several changes to the rules governing charitable deductions. The impact is most significant for higher-income taxpayers who itemize.
Starting in 2026, taxpayers who itemize can only deduct charitable contributions that exceed 0.5% of their adjusted gross income (AGI). For a taxpayer with $1 million in AGI, the first $5,000 in contributions is not deductible. For someone with $2 million in AGI, the floor is $10,000.
In some cases, deductions limited by the floor may be carried forward to future tax years. This change makes strategies like bunching—concentrating several years of giving into one year—more relevant, since exceeding the floor by a wider margin may preserve more of the deduction's value.
Taxpayers who take the standard deduction can now claim an above-the-line charitable deduction of up to $1,000 for single filers and $2,000 for joint filers. This applies only to cash contributions made directly to public charities. Gifts to donor-advised funds and private foundations do not qualify.
For taxpayers in the 37% federal bracket, the effective value of itemized deductions—including charitable contributions—is capped at approximately 35%, a modest reduction in the per-dollar tax benefit of giving for the highest earners.
The strategies below address different aspects of charitable giving. Some focus on what you give; others focus on when and through which vehicle. In some cases, the greatest benefit may come from combining approaches within a coordinated plan.
Contributing long-term appreciated securities—stocks, mutual funds, or ETFs held for more than one year—directly to a qualified charity or donor-advised fund can serve two purposes. The donor may avoid recognizing the capital gain that a sale would have triggered, and may also be eligible for an income tax deduction at the asset's fair market value, subject to the 30% AGI limit for noncash contributions.
This approach is especially relevant for investors holding positions with significant unrealized gains. Rather than selling the investment, paying capital gains tax, and donating the after-tax proceeds, donating the shares directly may allow the full pretax value to support the charity.
A financial advisor can help identify which positions in a portfolio may be well-suited for charitable contribution.
A donor-advised fund (DAF) is a charitable account that allows you to make a contribution, receive an immediate tax deduction, and then direct grants to specific charities over time. Contributions to a DAF can include cash, appreciated securities, and some other asset types.
DAFs can be particularly useful in a few situations:
One limitation: contributions to a DAF are irrevocable. Once funds are in the account, they are committed to charitable purposes, even though the timing and recipients of grants remain flexible.
Bunching means concentrating multiple years of charitable contributions into a single tax year, then taking the standard deduction in the off years. This approach can help a donor itemize in the bunching year and benefit from a larger deduction, while still maintaining their intended pace of giving over time (often by funneling the contribution through a DAF).
The OBBBA's 0.5% AGI floor adds a practical reason to consider this. A taxpayer who donates $10,000 per year may find that a meaningful portion falls below the floor each year. Donating $30,000 every three years pushes the contribution further above the floor and may preserve a larger share of the deduction.
For individuals age 70½ or older, qualified charitable distributions (QCDs) allow IRA funds to be sent directly to a qualified public charity. The distribution counts toward required minimum distributions (RMDs) but is excluded from taxable income.
The annual QCD limit is indexed for inflation. For 2026, the limit is $111,000 per individual, or $222,000 for married couples filing jointly. QCDs cannot be directed to donor-advised funds or private foundations.
Because QCDs reduce adjusted gross income rather than increasing itemized deductions, they can be especially relevant for retirees managing Medicare premium surcharges (IRMAA) or the taxation of Social Security benefits. A financial advisor can help assess whether QCDs fit within your withdrawal strategy.
A charitable remainder trust (CRT) is an irrevocable trust that provides income to the donor (or other named beneficiaries) for a set period, after which the remaining assets pass to a designated charity. CRTs can serve several purposes:
CRTs involve legal, tax, and administrative complexity, and they are typically most appropriate for donors with larger asset bases and long-term charitable goals. A financial advisor can help evaluate whether a CRT aligns with your situation.
Sources: Schwab, Fidelity, Fidelity Charitable
Charitable contributions don't have to be in cash or publicly traded securities. Depending on the charity or giving vehicle, donors may be able to contribute other types of assets, including:
Each asset type has its own rules around valuation, holding periods, and deduction limits. Some require qualified appraisals; others involve additional reporting requirements. These contributions tend to be more complex than gifts of cash or public securities, and working with a tax professional is especially important when donating non-standard assets.
Charitable giving decisions often intersect with other areas of financial planning. The way a gift is structured can affect capital gains exposure, estate tax calculations, retirement income, and Medicare costs.
Donating appreciated stock from a taxable account reduces the unrealized gain in that account, which may complement a broader capital gains management strategy. A large DAF contribution in the year of a business sale can offset some of the income from the transaction. QCDs can help manage the tax impact of RMDs during retirement.
On the estate side, assets donated to charity during your lifetime reduce the size of your taxable estate. For individuals with estates above the federal exemption threshold, charitable strategies can be one component of a broader tax planning approach.
These interactions are one reason charitable giving benefits from coordination across your advisory team. Decisions about which assets to give, when to give them, and through which vehicle can look very different depending on what else is happening in your financial plan in a given year.
EP Wealth advisors work with clients to evaluate charitable giving strategies in the context of their broader financial picture, including tax exposure, estate structure, and retirement income. If you'd like to discuss how your charitable goals fit within your plan, contact an advisor to get started.
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