Charitable giving: How to make your generosity count

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Charitable giving can have a twofold impact, with a gift for your favorite nonprofit organization and a potential tax break for you.

In 2024, Americans’ charitable giving totaled $592.5 billion, a 5% increase over 2023, according to Giving USA, which tracks how various groups donate to charity. Individuals continue to drive the trend, accounting for roughly two-thirds of all charitable contributions. And beginning with the 2026 tax year, the One Big Beautiful Bill Act (OBBBA) broadens access to charitable deductions by allowing standard-deduction filers to write off a limited amount of cash gifts to qualifying public charities.

People can donate to charities by giving cash, checks, securities, or properties. The first reason to donate to charities is to be generous, but depending on how much you can give, there may be tax benefits, too.

Whether charitable giving affects your taxes depends on how much you donate in any year. After the Tax Cuts and Jobs Act of 2017, the standard deduction rose sharply, which made it harder for many households to claim charitable deductions through itemizing. For the 2025 tax year, the standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly. And under the OBBBA, the cap on state and local tax (SALT) deductions increases to $40,000, which means more households may once again clear the itemization threshold. Here’s how that might look for a married couple filing jointly:

Their itemized deductions total $38,000—well above the standard deduction—so their $8,000 donation would be fully deductible. The average person may not make a sizable donation each year, so the key to getting a tax deduction is to have a strategy.

One strategy to support favorite charities and receive a tax deduction is to “bunch” donations, that is, to pool several years’ worth of donations into one year. This move works best in a year when you have other write-offs to lift you above the standard deduction threshold that allows you to itemize charitable gifts. However, bunching donations puts charities in a feast-or-famine mode; they’ll receive your big donation one year, but nothing for the next few years.

If you have significant assets, trusts are a charitable giving strategy that benefits both you and the nonprofit. These strategies take time to execute and are best created with the help of a financial advisor, as they are normally used as estate-planning tools. Here are five types of charitable strategies:

To be considered a tax-exempt organization under the 501(c)(3) Internal Revenue Code, an organization cannot benefit private interests, cannot be an action organization, and its political and legislative lobbying are restricted, according to the IRS.

Types of qualified organizations include:

Some nonprofit organizations are not eligible for deductible charitable contributions, including:

If you choose to donate cash to a qualified public charity, you can generally deduct up to 60% of your adjusted gross income (AGI). For non-cash gifts, the limit depends on the type of property and the type of organization you support. Appreciated assets (i.e., those with capital gains) donated to public charities are typically subject to a 30% AGI limit, and certain property gifts or donations to private foundations may fall under the 20% limit.

When it comes to giving cash, the donation is recorded at the time it’s given. Note that cash doesn’t just mean dollar bills—it’s also credit cards and checks. A credit card contribution is deductible in the year it’s charged to the card. Donations made by check and sent through the mail will count in the year they were mailed.

If you donate big-ticket goods, such as art, real estate, or vehicles, the IRS has certain requirements regarding their fair market value, which may require an appraisal. IRS Publication 561 offers specifics.

Additionally, if you attend a benefit for a qualified 501(c)(3) and you pay more than the fair market value (FMV) for a good or service, the excess can be considered a charitable contribution. Upon purchase of the good or service, the organization should report to you the FMV. For example, if your gala ticket was $150, and you received a meal worth $50, you could include $100 in your charitable total. If you bought $50 in raffle tickets at the event and you didn’t win anything, you could add another $50 to your total.

Whether you donate cash, securities, or other assets, be sure to get receipts for any donations.

Start by deciding what type of charitable work resonates with you. Is it caring for animals, feeding the hungry, or supporting the arts? Do you want to support local, national, or international charities? What size of organization do you want to support—small, medium, or large?

Once you narrow the criteria down, start to investigate the charity. If it’s local, you may be able to talk to the executive director or a board member. They are often passionate about their work, and you can find out more about their community impact.

Visit websites such as Charity Navigator or Candid GuideStar to dig into an organization’s financials. These websites gather publicly available information about nonprofits in one place, including organizations’ annual tax filing, Form 990, total revenue, and expenses and salaries of key persons.

Signs of a well-run charity include:

Getting a tax write-off for charitable giving is a nice benefit, but the primary motive for donating to charity should be altruism. The classic saying among charities is that people can donate three ways:

Donating time. Volunteering time is a great way to involve children in charitable activities, and it builds on most children’s natural desire to help. As a family, discuss what organizations are important to you and encourage children to choose a nonprofit to support. Supporting animal shelters or parks are good ways to involve young children, while older children can volunteer at places such as food pantries to see their impact in action and pick up important social skills as they interact with people of different ages and backgrounds.

Donating treasure. Make donating money to charity a line item in the budget. Children can use piggy banks to save part of their allowance, while teens with jobs can learn to budget by allocating part of their paychecks to charity. Charities suggest monetary donations have a bigger impact if donors focus on a few organizations and give more significant funding, rather than spreading a few dollars over several groups.

Donating talent. People with in-demand skills such as languages, technology, legal experience, or a host of other skills can donate their talents to nonprofits.

Unscrupulous people may try to fake being a charity to steal money, so if you’re looking to make donations, avoid falling for scams. Charity Navigator offers these tips:

The primary goal of charitable giving is to help an organization you believe in. Tax deductions can be useful for people who give enough money to itemize their taxes, so it makes sense to be strategic if that is a goal. In those cases, work with a financial advisor to make sure the donations and tax accounting are done properly. Even if you don’t itemize, start saving receipts in 2026 to deduct up to $1,000 per filer under the OBBBA.

Know which types of organizations can receive tax-deductible donations and which ones can’t. Donating to charities can do a lot of good for you and the organization, and establishing a connection can result in years of goodwill.

It’s better to give than to receive. But it’s best when you’ve done your homework.