Year-End Giving Strategies: Helping Your Donors Give Smarter

The final weeks of the year are when donor generosity tends to peak. More than 36% of all charitable revenue arrives in the fourth quarter, with December alone accounting for roughly 18% of annual giving.¹ While that concentration is not new, the tax landscape is.

The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, reshapes how donors can deduct charitable gifts starting in the 2026 tax year, and the changes affect both itemizers and nonitemizers. For board leaders and executive directors, understanding these year-end giving strategies can help your organization capture gifts that it might otherwise miss out on and guide supporters toward smarter gifts.

Donors who plan giving strategies around the new rules can give with bigger impact — and your organization may benefit. The key is starting the conversation early, well before Dec. 31 deadlines and when processing times compress your window.

What changes in 2026 under the new laws

Your donors might be considering these three charitable giving provisions:

1. A new 5% floor on itemized charitable deductions is in place, meaning donors who itemize can deduct only the portion of their giving that exceeds 0.5% of their adjusted gross income (AGI). For example, a donor with $500,000 in AGI would not be able to deduct the first $2,500 of charitable gifts. However a donor may be able to carry over and deduct any amount that falls below the 0.5% threshold for up to five years.
2. The legislation creates a permanent above-the-line deduction for nonitemizers of up to $1,000 per filer, or $2,000 for joint filers. This gives donors who take the standard deduction a new reason to give, potentially broadening your base of smaller and midlevel donors.
3. The value of itemized charitable deductions is capped at 35% for donors in the top 37% marginal bracket, reducing the tax benefit of larger gifts for high-income supporters. Corporate donors face a new 1% floor on their charitable deductions as well.

Five strategies for your donors

The following year-end giving strategies span tax planning, estate planning, and investment management. If you and your development team understand them and can introduce the concepts to your donors, they may benefit you as well as them.

1. QCDs from IRAs

A qualified charitable distribution (QCD) allows donors age 70 ½ or older to transfer up to $111,000 per year (for 2026) directly from a traditional IRA to an eligible public charity. The IRS excludes the distribution from taxable income, and for a donor over age 73, the QCD can satisfy all or part of their required minimum distribution (RMD).

QCDs now have a key advantage: They help reduce AGI rather than producing an itemized deduction, which means QCDs bypass the new 0.5% floor entirely. This makes a QCD one of the most tax-efficient year-end giving tools available, especially for donors whose giving might otherwise fall below the deduction threshold. Among the year-end giving strategies nonprofits can promote, QCDs are particularly valuable eligible donors.

An important limitation to communicate to your donors is that they cannot direct QCDs  to donor-advised funds, private foundations, or supporting organizations. QCDs must flow directly from the brokerage or firm holding the IRA funds to an operating public charity, so confirm your organization’s charitable status and its eligibility to accept these gifts.

2. Bunching through a DAF

Bunching consolidates several years of planned giving into a single tax year to exceed the 0.5% AGI floor and the standard deduction threshold. A donor-advised fund (DAF) helps maximize a donor’s giving impact and makes bunching a practical option by letting the donor contribute a larger lump sum in one year, claims an immediate deduction, and then recommend grants to your organization over the following years.

For example, a donor who typically gives $20,000 per year could transfer $100,000 to a DAF in a single year. The 0.5% floor applies only once to the full $100,000 rather than eroding the deduction on each annual $20,000 gift. The donor can then direct $20,000 per year to an organization from the fund over five years, preserving both the tax benefit and the relationship.

This strategy pairs naturally with the new above-the-line deduction. In years when donors take the standard deduction, they can still claim up to $1,000 (or $2,000 for joint filers) for cash gifts while fulfilling their charitable intent through DAF grants from a prior bunching year.

3. Gifts of appreciated securities

Donating appreciated securities, such as stocks or mutual funds held for more than one year, offers two distinct tax advantages. The donor avoids capital gains tax on the appreciation and can generally deduct the full fair market value at the time of the gift.

With markets near record highs, this strategy can unlock larger gifts than cash alone. Nonprofits that actively accept and promote stock gifts may see gifts increase significantly compared with organizations that rely solely on cash. The mechanics aren’t complicated. The donor instructs their broker to transfer shares directly to your organization or to a DAF, and the charity, as a tax-exempt entity, pays no capital gains tax when it sells the securities.

Because the 35% deduction cap for top-bracket donors takes effect in 2026, completing appreciated asset gifts before year-end can help donors maximize the available tax benefits. As part of your year-end giving strategies, stock gifts could meaningfully increase gift sizes.

4. QCD conversations earlier in the year

Timing is everything with QCDs. Nearly seven in 10 organizations report that QCD gifts peak at the end of the year, driven by RMD deadlines.² That year-end concentration may be a sign that the conversation is starting too late.

Consider a year-round touchpoint calendar. In January, you could reach donors with a brief message about directing IRA gifts before their first RMD. From February through April, when donors meet with their CPAs, maybe include a QCD explanation in your newsletter. In October and November, you might focus on mechanics and deadlines, reminding donors that the deadline is Dec. 31 with no extensions and that they should allow time for processing the transfer.

5. Planned giving related to the wealth transfer

The largest intergenerational wealth transfer in U.S. history is underway, and DAFs, bequests, and charitable trusts are an important part of how that wealth moves. Communicate with your donors about naming your organization as a beneficiary of a DAF remaining balance — an ask that can produce consequential gifts when a donor passes away.

For donors who want income from their gift, up to $55,000 of the 2026 QCD limit can fund a charitable gift annuity or charitable trust. These estate planning structures can open meaningful conversations with donors who want to support your mission while keeping an income stream.

Bringing it all together

Year-end giving programs can be most effective when coordinated across financial planning, tax planning, estate planning, and investment management. A donor who bunches through a DAF may also be a candidate for a QCD. A donor who gives appreciated securities this year may be ready to discuss a legacy gift next year.

As a board leader or executive director, you have an opportunity to start the conversation with your donors and share how these strategies can help them give smarter — to support your organization and a cause they care about. The Mercer Advisors Endowments & Foundations team can serve as an extension of your development team, offering donor education and guidance on tax-efficient giving. When donors have access to thoughtful giving strategies, it can help strengthen support for your mission.