The Charitable Giving Toolbox

Charitable giving can take many forms – from what you donate to how you do it. Understanding your options can help you choose an approach that aligns with your wealth plan, your philanthropic goals and the causes you care about.

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What You Can Give

The right asset to give may depend on what you own, what the organization can accept and what you hope to accomplish.

Cash

While generally the least tax-efficient, cash is a simple, familiar way to give – and is immediately usable by the organization.

When it works best: You’re helping an organization address an urgent need or making smaller, recurring contributions as part of a broader giving strategy.

Appreciated Stock, Mutual Fund Shares and Employer Stock

If you have appreciated stock or mutual fund shares that you’ve held for more than a year and are looking to donate, consider gifting the holding directly. With this approach, the organization can sell the shares without either of you incurring capital gains tax. Plus, this allows you to take a charitable tax deduction based on the full fair market value of the stock the day it was transferred.

When it works best: You want to give without drawing down your cash reserves or are looking to address concentration or significant capital gains in your portfolio.

Tangible Assets

Real estate, vehicles, artwork or other personal property can also be donated to charity. Just keep in mind that these donations receive unique tax treatment: Your deduction may be limited and is often not based on the asset’s full fair market value. Certain noncash gifts may also require a qualified appraisal to claim the deduction.

When it works best: The organization has a need for a specific item – like a used car – or you want to incorporate noncash donations into a broader charitable plan rather than make a one-time gift.

How You Can Give

Timing, tax treatment and the level of control you want can all shape how you give – and which approach best supports your broader plans.

1. Strategies

These approaches can help your gifts better align with your taxable income, deductions and goals.

Bunching

Bunching combines two or more years’ worth of donations into one larger gift made in a single year, rather than spreading smaller gifts across multiple years. This can push your giving above the standard deduction in the year of the larger gift, allowing you to maximize the tax benefit for that year. Then, you can return to taking the standard deduction in the “off” years.

When it works best: You consistently give to charity, but aren’t able to consistently itemize your deductions.

Qualified Charitable Distributions

Once you reach age 70½, you can send money directly from your IRA to a qualified public charity via a QCD. In 2026, you can give up to $111,000 as a QCD, with the amount donated excluded from your taxable income. A QCD can even count toward your required minimum distribution (RMD).

When it works best: You have RMD requirements to satisfy and want to lower your taxable income or avoid a higher tax bracket.

2. Structures

These dedicated account types can help you organize and distribute charitable gifts over time.

Donor-Advised Funds

A DAF allows you to contribute assets now and recommend which charities receive the funds (and when) later on. Your contribution often qualifies for an immediate tax deduction, while the assets in the account can continue to be invested for potential tax-free growth.

When it works best: You’re looking for an immediate tax benefit, but still need time to pin down the details of your giving strategy.

Private Foundations

A private foundation is a charitable trust or nonprofit corporation funded by you or your family. The assets you contribute generally leave your taxable estate and move into the foundation, where you oversee how they are invested and distributed. Keep in mind, though, that it may be harder to deduct these gifts.

When it works best: You want greater control over how charitable assets are managed and distributed, more flexibility in the organizations you support or to take steps toward solidifying a multigenerational giving strategy.

Charitable Remainder Trusts and Charitable Lead Trusts

CRTs and CLTs allow your assets to benefit both charities and other beneficiaries over time. When you contribute assets, they move out of your taxable estate and are managed according to the terms of the trust. While a CRT pays income to you or another beneficiary before the remainder goes to charity, a CLT reverses the order.

When it works best: You want to support charitable causes while still providing income for your family.

Talk with your Baird Financial Advisor team to find the right charitable approach for you and your family.

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