What changed in 2026
Three changes matter most for individual donors.
1. A new deduction for people who don't itemize. If you take the standard deduction, you can now deduct up to $1,000 in cash gifts, or $2,000 if you're married filing jointly. The gifts must be cash, made in 2026, to an eligible charity. According to the IRS, donations to Donor-Advised Funds generally don't qualify, and you'll need receipts, canceled checks, or bank records to back it up.
2. A 0.5% floor for people who do itemize. Only the portion of your charitable giving above 0.5% of your adjusted gross income (AGI) is deductible. If your AGI is $200,000, the first $1,000 you give each year doesn't count toward your deduction.
3. A 35% cap for top-bracket donors. If you're in the 37% bracket, the tax benefit of your itemized deductions, including charitable gifts, is now capped at a 35% rate.
One change works in donors' favor: the 60%-of-AGI limit for cash gifts to public charities is now permanent.
Where a Donor-Advised Fund fits now
The 0.5% floor is applied every year you itemize. If you give a similar amount each year, you pay that "entry fee" every year. Concentrating several years of giving into one year, often called bunching, means you clear the floor once instead of several times. In the off years, you can take the standard deduction.
A DAF makes bunching practical. You contribute to the fund in the year you want the deduction, then recommend grants to the charities you support on your usual schedule. Your favorite organizations still hear from you every year, even though the tax deduction landed in one.
A DAF can also hold more than cash. Gifts of appreciated assets like publicly traded stock, mutual funds, real estate, or crypto are generally deductible up to 30% of AGI, and the appreciation avoids capital gains tax.
It's worth being clear about what a DAF won't do in 2026:
It doesn't count toward the new non-itemizer deduction. If you take the standard deduction, cash given directly to a public charity is what qualifies.
It can't receive a qualified charitable distribution (QCD) from your IRA. QCDs have to go directly to the charity.
For many donors, the right answer is a mix: a DAF for planned, larger giving, and direct gifts where the rules favor them.
Before December 31: moves to consider
Figure out whether you'll itemize for 2026. Everything else depends on this answer, so it's the first conversation to have with your tax advisor.
If you won't itemize, give cash directly. Gifts of up to 1,000 (2,000 for joint filers) to eligible public charities can now be deducted. Keep the receipts.
If you will itemize, consider bunching through a DAF. Funding a DAF with more than one year's giving in 2026 means you clear the 0.5% floor once, then grant from the fund over the coming years.
Give appreciated assets instead of cash. Contributing stock or other appreciated assets to a DAF or charity can avoid capital gains tax on the growth. Transfers can take time to settle, so start early.
If you're 70½ or older, look at a QCD. You can give up to $111,000 in 2026 directly from your IRA to charity. The amount is excluded from your income and can count toward your required minimum distribution.
Don't wait until the last week. A gift has to be complete by December 31 to count for 2026.
FAQ
Can I use the new $1,000 / $2,000 deduction for a gift to my donor-advised fund?
No. The IRS says donations to donor-advised funds generally don't qualify for the non-itemizer deduction. To use it, give cash directly to an eligible public charity.
Does the 0.5% floor mean I lose my deduction entirely?
No. It only applies if you itemize, and it only removes the first 0.5% of your AGI. With an AGI of $100,000, the first $500 of giving isn't deductible; everything above that still is, subject to the usual limits.
I'm 70½ or older. Can I send a QCD to my DAF?
No. Qualified charitable distributions must go directly from your IRA to the charity, not to a donor-advised fund. You can still use a QCD for direct gifts, up to $111,000 in 2026, and use your DAF for other assets.
Sources
IRS, Publication 6196: Charitable Contribution Deduction Tips for Non-Itemizers (October 2026)
Mark A. Luscombe, JD, LLM, CPA, "Planning for Charitable Contributions in 2026", CPA Practice Advisor (February 18, 2026)
This post is for general information and isn't tax or legal advice. Talk with your tax advisor about how these rules apply to you.
