Meaningful Giving: Philanthropy Playbook

Giving back is not only a noble pursuit, but also a helpful tool for financial planning. Whether you’re supporting loved ones or championing causes close to your heart, there are a variety of strategies that can help maximize the impact of your gifts while managing potential tax implications. 

Understanding your options can make all the difference in turning generosity into a lasting legacy. With recent changes to tax laws, 2026 presents an opportunity to revisit and refresh your charitable giving strategy. Below are several approaches, from annual gifting to charitable trusts, that can help you give meaningfully, efficiently, and tax-effectively.

Charitable Trusts: Long-Term Giving with Estate Planning Benefits

For those looking to combine philanthropy with estate planning, charitable trusts offer a flexible and powerful solution. These trusts can provide income for the donor or other beneficiaries while ultimately benefiting charitable organizations. Charitable remainder trusts (CRTs) and charitable lead trusts (CLTs) are two common options that allow you to balance financial planning with your charitable intentions. Establishing such trusts can also help reduce estate and gift taxes, making them a valuable tool for long-term planning.

• Charitable remainder trusts (CRTs): With a charitable remainder trust, the donor receives the income from the trust throughout their lifetime or a specified time period. After the donor passes away or the term ends, the remainder assets are donated to a designated charity.
• Charitable lead trusts (CLTs): Charitable lead trusts pay income to the designated charity for a specified time period, which can be a set number of years or the lifetime of the donor to another individual. Once this term ends, remaining assets are given to the donor’s heirs or selected beneficiaries.

Annual Gifting – A Simple and Effective Way to Give

Annual gifting provides a powerful opportunity to make a meaningful impact on your loved ones and may help reduce your estate's tax burden. By gifting up to the annual exclusion limit, you can give tax-free gifts to an unlimited number of recipients without depleting your lifetime exemption.

Under the One Big Beautiful Bill Act (OBBBA), the federal lifetime estate and gift tax exemption will permanently increase to $15 million per person beginning in 2026. For 2025 and 2026, the annual gift tax exclusion remains at $19,000 per recipient ($38,000 for married couples through gift‑splitting). Gifts above the annual exclusion may require filing IRS Form 709 and could count toward your lifetime exemption. Remember to be aware of your state level estate and gift taxes, as these may vary significantly based on location. Read more about the OBBBA tax changes here.

In addition to the standard annual gifting, there are several ways to strategically enhance the benefits:

• Roth IRA Contributions: If your children have earned income, consider contributing to their Roth IRAs. This can be a powerful way to set them up for a financially secure future, with contributions up to $7,500 per year in 2026.
• 529 Plans: 529 plans are a fantastic way to save for your children’s or grandchildren’s education. You can use the annual exclusion gift to fund these accounts, and even "front-load" up to five years of contributions in a single year. Keep in mind that if you take advantage of this strategy, you will not be able to make additional annual exclusion gifts to the same beneficiary for the next four years. You can read more about 529 savings plans here.
• Direct Payment for Tuition and Medical Bills: Beyond annual gifting, you can directly pay for someone’s tuition or medical bills without any gift tax consequences. These payments are unlimited in amount, allowing you to support your loved ones' education and health without reducing the annual gifting limits.

Donor-Advised Funds (DAFs)

A Donor-Advised Fund (DAF) is an increasingly popular way to make charitable donations while maintaining control over how and when the funds are distributed. By contributing assets into a DAF, you can receive an immediate tax deduction for the gift. Over time, you can decide which charities to support and how much to give them, offering flexibility in your philanthropic efforts. The funds in a DAF can be invested and grow, allowing your gift to have an even greater impact in the future.

Corporate Gifting

For corporate donors, OBBBA added a new floor for 2026 (previously there was no minimum). Corporations will need to contribute at least 1% of their taxable income prior to charitable gifts to qualify for a deduction, meaning that the first 1% of their taxable income donated to charity will not generate a tax deduction. The rule which limits corporate charitable deductions to 10% of taxable income will still apply and gifts exceeding the 10% ceiling can be carried forward for up to 5 years. Therefore, only contributions which exceed the 1% floor and don’t exceed the 10% ceiling are deductible in the current year.

Qualified Charitable Distributions (QCDs)

For those who are 70½ or older, you can use your IRA to make charitable donations directly, known as Qualified Charitable Distributions (QCDs). With QCDs, in 2026 you can donate up to $111,000 per year directly to charity, which can satisfy your Required Minimum Distributions (RMDs) and help lower your taxable income.

If you are itemizing your deductions, charitable contributions are subject to a 0.5% of adjusted gross income (AGI) floor beginning in 2026. This means that only the portion of your total contributions exceeding 0.5% of your AGI is deductible. 

For example, if your AGI is $200,000, the first $1,000 of contributions would not be deductible. Cash donations to qualified charities are generally deductible up to 60% of AGI, while donations of appreciated assets (such as long‑held stocks) can be deducted at fair market value and are limited to 30% of AGI. Donating appreciated assets directly to a charity also allows you to avoid capital gains taxes on the appreciation. Even if you do not itemize, you may still claim a universal charitable deduction: up to $1,000 for single filers or $2,000 for joint filers for cash contributions to qualified charities.

Deduction Benefits Cap for High-Income Donors

Due to OBBBA, donors wo are within the top federal tax bracket will have a lowered limit for charitable donations of 35% in 2026 (in 2025, the limit was 37%). Therefore in 2026 the top bracket will be applicable at $640,601 for singles and $768,701 for married couples filing jointly.

Donating Appreciated Securities

If you own appreciated stocks or securities, donating them directly to charity can be a highly effective strategy. Not only do you avoid paying capital gains taxes on the appreciation, but you also receive a charitable deduction for the full market value of the asset. This can be a tax-efficient method to support your favorite causes while optimizing the value of your gifts.

Incorporating thoughtful financial strategies into your giving plan can make a significant difference in the lives of your loved ones and the causes you care about. By understanding tools like annual gifting, donor-advised funds, charitable trusts, and other charitable giving strategies, you can maximize the impact of your contributions while minimizing your tax liabilities. Whether you're looking to make a difference in the lives of your family, support education, or further a cause, these strategies provide a way to give in a manner that is both meaningful and financially sound.

Speak with an Oppenheimer Financial Professional today to learn more.