Planned Giving: Building a Charitable Legacy That Lasts

Charitable Giving

By Chris Hilyer, Heritage Wealth Solutions · September 2026 · 9 min read

"I want to give more, but I want to make sure it's done in a way that actually lasts and involves my family."

I love it when this topic comes up with my clients. You've spent decades building something meaningful. Now you want your giving to reflect that same level of care and intention.

The good news is there are tools designed to do just that. The less-good news? The rules around charitable giving shifted this year, and what worked in 2025 might not work the same way in 2026.

Let's walk through what changed, what's available, and how to build a giving strategy that does more than just feel good in the moment.

Buckle in. There's a lot to cover.

New Charitable Deduction Rules in 2026: The 0.5% AGI Floor

The One Big Beautiful Bill Act (OBBBA) introduced a new floor on charitable deductions for individuals starting in 2026. Here's how it works: your charitable contributions are now deductible only to the extent they exceed 0.5% of your adjusted gross income (AGI).

In practical terms, if your AGI is $500,000, the first $2,500 of your charitable giving doesn't count toward your deduction. Only amounts above that floor generate a tax benefit.

For corporations, the floor is 1% of taxable income.

This doesn't mean giving is less worthwhile. It means the way you structure your giving matters more than it used to. Smaller, scattered donations throughout the year may no longer move the needle on your tax return. That's where strategy comes in.

If you're rethinking how your charitable giving strategy fits into the bigger picture, the rest of this blog lays out the tools worth knowing about.

Bunching Charitable Donations With a Donor-Advised Fund

One of the most straightforward responses to the new AGI floor is bunching. Instead of donating $5,000 a year for five years, you contribute $25,000 in a single year. That clears the floor by a wide margin and generates a meaningful deduction in the year you give.

What Bunching Actually Does to Your Deduction

Here's where it gets real. Let's say your AGI is $500,000. That means your charitable deduction floor under the new rules is $2,500 (0.5% of $500,000). Any giving below that amount? No deduction.

Now compare two approaches for giving $25,000 total over five years:

Same generosity. Same charities. But bunching puts $10,000 more in deductions back in your pocket over five years. That's the difference the new floor creates, as shown in this example, which may provide for more deductions.

But you probably still want your favorite organizations to receive support every year, not just during the year you bunched. That's where a donor-advised fund (DAF) comes in.

A DAF lets you make one large contribution, take the deduction upfront, and then recommend grants to charities over time. You fund it once. You direct it for years. And the organizations you care about receive consistent support on whatever schedule you choose.

It's one of the simplest planned giving tools available, and with the new AGI floor in place, it may make it worth considering as part of a charitable giving strategy.

Charitable Trusts, Bequests, and Other Long-Term Giving Structures

Bunching and DAFs may solve the near-term problem. But if you're thinking about giving that spans decades or even generations, there are structures built for that.

Charitable Remainder Trusts (CRTs). You transfer assets into the trust, receive an income stream for a set number of years or for life, and when the term ends, the remaining assets go to the charity of your choice. You also receive a partial tax deduction when the trust is funded. CRTs work especially well with highly appreciated assets because the trust can sell them without triggering immediate capital gains.

Charitable Lead Trusts. These work in the opposite direction. The charity receives income from the trust for a set period, and then the remaining assets pass to your heirs, often at a reduced gift or estate tax cost. It's a way to support a cause you care about now while transferring wealth to the next generation later.

Charitable Bequests. The simplest long-term giving tool. You name a charity in your will or revocable trust and designate a specific dollar amount, a percentage of your estate, or the remainder after other distributions. No tax benefit while you're alive, but the amount is deductible against your estate.

Beneficiary Designations to Charities. You can name a charity as the beneficiary of an IRA, 401(k), or life insurance policy. This is one of the most tax-efficient ways to give, because retirement account assets left to a charity bypass both income tax and estate tax entirely.

Endowment-Style Gifts. For families who want to fund a cause in perpetuity, endowment gifts provide ongoing support from the investment earnings while preserving the principal. This is the model behind university scholarships, community foundations, and named funds at hospitals and nonprofits.

These tools overlap with estate planning in important ways. If you're already working on an estate plan, consider charitable goals as part of that conversation.

Qualified Charitable Distributions (QCDs): The $111,000 Workaround for the AGI Floor

If you're 70½ or older and have a traditional IRA, qualified charitable distributions (QCDs) are worth a close look.

A QCD lets you send up to $111,000 per year directly from your IRA to a qualified charity. The distribution counts toward your required minimum distribution (RMD) but isn't included in your taxable income.

Here's why that matters under the new rules: because the QCD never hits your tax return as income, the AGI floor doesn't apply to it. You sidestep the 0.5% floor entirely.

For retirees who are already giving and already taking RMDs, this is one of the most efficient tools available. It reduces taxable income, satisfies RMD requirements, and supports the organizations you care about, all in one move.

Involving the Next Generation in Your Giving

Money is one of the hardest things for families to talk about. Giving can actually make that conversation easier.

Family giving programs create a structure for those conversations. Some families set up a donor-advised fund with a shared advisory role, where children or grandchildren help choose which organizations receive grants each year. Others establish a small family foundation with a governance structure that teaches the next generation about philanthropy, investment oversight, and decision-making.

The point isn't to hand over control. It's to use giving as a way to pass on values alongside wealth. When a 25-year-old gets to research a nonprofit, evaluate its impact, and recommend a $10,000 grant from the family fund, they're learning something that no inheritance check will ever teach them.

If that kind of multigenerational planning sounds like what you're working toward, our Legacy Builders page walks through how we approach it.

Why This Matters More Than the Tax Code

The technical side of planned giving is real, and it matters. The AGI floor changed the math. DAFs, CRTs, and QCDs each solve a different piece of the puzzle.

But the reason most people explore planned giving isn't for the deduction. It's the desire to leave something behind that reflects who they are and what they care about. A scholarship fund in your family's name. A program at a nonprofit that keeps running long after you've stepped away from the board. A tradition of generosity that your grandchildren carry forward because they saw you do it first.

That's what planned giving is really about. The structures just help you do it well.

Frequently Asked Questions About Charitable Giving in 2026

Want to talk about building a giving strategy that lasts? Visit heritagewealth.pro/contact to schedule a conversation.