Charitable Giving & Legacy Planning

A financial legacy does not have to benefit only relatives.

Many individuals also want their life's work to support:

• A church or faith community
• A school or scholarship program
• A hospital
• A cultural association
• A community organization
• Families experiencing hardship
• Medical research
• Youth development
• Entrepreneurship
• Disaster relief
• A charitable foundation
• Another cause that reflects their values

Charitable giving may take place during life, after death, or through a combination of both.

However, good intentions alone do not guarantee that a gift will:

• Reach the intended organization
• Be used for the intended purpose
• Qualify for a tax deduction
• Coordinate properly with a will or trust
• Avoid unnecessary administrative problems
• Protect the donor's own financial security
• Produce the desired long-term impact

Thoughtful charitable planning connects generosity with preparation.

The goal is not simply to give.

The goal is to give intentionally, responsibly, and in a way that supports the donor's complete financial and legacy plan.

Tax considerations may influence how a charitable gift is structured, but taxes should not be the only reason for giving.

Begin by asking:

• Which causes matter most to me?
• What problem do I hope the gift will address?
• Do I want to help people today or create long-term support?
• Do I want my family involved?
• Do I want the gift used for a specific program?
• Do I want the organization to have flexibility?
• Should the gift be made during my lifetime or after my death?
• Can I make the gift without weakening my own financial security?

A tax deduction does not make an ineffective organization effective.

Likewise, the absence of a deduction does not automatically mean a gift has no personal or social value.

The giving method should serve the charitable purpose—not replace it.

A charitable plan becomes clearer when the donor identifies what the gift is meant to accomplish.

Possible purposes include:

• Funding education
• Supporting religious ministry
• Providing food, housing, or healthcare
• Preserving cultural heritage
• Supporting a community center
• Funding scholarships
• Supporting research
• Responding to disasters
• Protecting the environment
• Supporting children or older adults
• Expanding financial education
• Supporting entrepreneurship
• Continuing a family tradition
• Honoring someone's memory

Complete this sentence:

"I want my charitable legacy to help __________ by __________."

For example:

"I want my charitable legacy to help young people obtain professional education by supporting an annual scholarship."

That statement is more useful than simply saying:

"I want to leave something to charity."

The clearer the purpose, the easier it becomes to select the right organization, asset, document, and giving structure.

Generosity should be coordinated with your own financial needs.

Before making a major lifetime donation, consider:

• Retirement income
• Housing
• Healthcare
• Long-term care
• Emergency savings
• Insurance
• Debt
• Taxes
• Dependents
• Business obligations
• Inflation
• Longevity
• Possible incapacity

A donor who gives away too much too early may later need financial assistance.

Before transferring valuable assets, ask:

• Can I afford to lose permanent control of this property?
• Could I need this asset for healthcare or retirement?
• Will the gift affect my cash flow?
• Is the asset producing income I currently need?
• Will the transfer create tax or reporting obligations?
• Does my spouse or family depend on this property?
• Is the gift revocable or irrevocable?

A sustainable charitable legacy should support generosity without creating preventable insecurity.

Lifetime giving allows the donor to see the organization use the contribution.

It may also create opportunities to:

• Build a relationship with the charity
• Observe how funds are managed
• Participate in a program
• Teach children about generosity
• Create a recurring family-giving tradition
• Support an urgent need
• Adjust future giving based on results
• Receive acknowledgment during life
• Evaluate whether the organization remains aligned with the donor's values

Lifetime gifts may include:

• Cash
• Checks
• Electronic transfers
• Publicly traded securities
• Real estate
• Business interests
• Personal property
• Vehicles
• Insurance interests
• Grants from a donor-advised fund
• Qualified charitable distributions from an IRA
• Volunteer-related expenses that meet applicable requirements

Different assets involve different valuation, reporting, legal, and tax considerations.

A person may include a charitable gift in a will or trust.

The gift may be structured as:

For federal estate-tax purposes, qualifying charitable bequests may generally be deducted from the gross estate, but the rules depend on the organization, gift, document language, and administration of the estate.

A charitable gift can fail or become difficult to administer when the organization is described incorrectly.

The estate-planning document should generally include:

• The organization's full legal name
• Current address
• Employer identification number, when appropriate
• The intended purpose of the gift
• Instructions for what should happen if the organization changes its name, merges, or no longer exists

Avoid relying only on:

• A nickname
• A ministry leader's name
• A local branch name
• An outdated organization name
• A social-media account
• An informal community label

Several organizations may have similar names.

Confirm the organization's legal identity before signing the will, trust, beneficiary form, or other gift document.

Not every nonprofit or tax-exempt organization is eligible to receive tax-deductible charitable contributions.

The IRS Tax Exempt Organization Search tool allows donors to review an organization's tax-exempt status, eligibility to receive deductible contributions, and certain filings.

However, some qualified organizations—such as certain churches, governmental entities, and organizations operating under group exemptions—may not appear as separate entries in the database.

Before claiming a deduction or making a substantial gift, confirm:

• The organization's legal name
• Its federal tax classification
• Whether contributions are deductible
• Whether its status has been revoked
• Whether the gift will go to the national organization or a local affiliate
• Whether the organization can accept the proposed asset
• Whether any restrictions will be honored

Tax-exempt status and tax-deductible contribution eligibility are related concepts, but they are not identical.

Helping a person directly may be compassionate and meaningful.

However, a direct gift to an individual is generally not deductible as a charitable contribution for federal income-tax purposes.

Examples include giving money directly to:

• A relative experiencing hardship
• A friend with medical expenses
• A particular student
• A family affected by disaster
• An individual fundraising online
• A community member whose home was damaged

A donation to a qualified charitable organization that operates a program serving eligible individuals may be deductible when the organization retains control and discretion over how funds are used.

The donor generally cannot use a charity merely as a pass-through while requiring that the contribution be given to one specifically identified person.

The charitable organization—not the donor—must control the donated funds according to applicable rules.

A contribution may be generous without producing a federal income-tax deduction.

Deductibility may depend on:

• Whether the recipient is a qualified organization
• Whether the donor receives goods or services
• The type of property donated
• The donor's tax-filing position
• Adjusted gross income limitations
• Whether required documentation was obtained
• Whether the contribution was completed during the tax year
• Whether the donor retained control or received a personal benefit
• Whether the gift was made to an individual or foreign organization
• Whether the contribution complied with special property rules

Beginning with tax year 2026, taxpayers who do not itemize may deduct up to $1,000—or $2,000 for qualifying joint filers—of cash contributions to certain qualified organizations. Other charitable deductions may still depend on itemizing and are subject to applicable limitations.

Tax rules change. Donors should verify current requirements with the IRS and a qualified tax professional.

A charitable fundraiser may include:

• Dinner
• Event admission
• Merchandise
• Entertainment
• Travel
• Membership benefits
• Auction items
• Recognition gifts

When the donor receives goods or services in exchange, the deductible amount may generally be limited to the amount paid above the fair market value of the benefit received.

For example:

A donor pays $300 for a fundraising dinner.

The fair market value of the meal and event admission is $100.

The potentially deductible portion may be limited to $200, subject to the other charitable-contribution rules.

The full payment should not automatically be treated as a gift.

For monetary contributions, donors should retain a bank record or written communication from the qualified organization showing:

• The organization's name
• The date
• The amount contributed

For a contribution of $250 or more, the donor generally must obtain a timely written acknowledgment that describes the contribution and states whether the organization provided goods or services in return.

Useful records may include:

• Cancelled checks
• Bank statements
• Credit-card statements
• Electronic receipts
• Donation confirmations
• Payroll-deduction records
• Written acknowledgment from the charity
• A copy of the beneficiary or estate-planning document

Do not depend entirely on memory or a verbal thank-you.

A person may give property instead of cash.

Examples include:

• Clothing
• Furniture
• Vehicles
• Artwork
• Jewelry
• Equipment
• Real estate
• Publicly traded securities
• Business interests
• Cryptocurrency
• Intellectual property
• Collectibles

The tax deduction is not necessarily equal to:

• The original purchase price
• The replacement cost
• The donor's personal estimate
• The price the donor hopes the charity will receive

Valuation rules may depend on fair market value, tax basis, holding period, how the charity uses the property, and the type of asset.

When total noncash deductions exceed $500, Form 8283 may be required. For many noncash gifts exceeding $5,000, a qualified appraisal and additional documentation may be necessary, although exceptions apply to publicly traded securities and certain other assets.

The charity's signature acknowledging receipt does not necessarily mean it agrees with the donor's claimed value.

Some donors consider giving appreciated stock, mutual-fund shares, or other investment property rather than selling the asset and donating cash.

Potential considerations include:

• The donor's tax basis
• Current market value
• How long the asset has been held
• Whether the charity can accept securities
• Capital-gains consequences
• Deduction limitations
• Transfer deadlines
• Investment concentration
• Whether the donor still needs the asset
• Whether the donation will be made directly or through another charitable vehicle

The transaction should be coordinated before the asset is sold.

Selling an asset personally and then donating the proceeds may produce a different tax result from transferring the asset directly to the charity.

Do not transfer investment property without obtaining current tax and financial guidance.

A charity may sometimes be named as a beneficiary of:

• A retirement account
• Life insurance
• An annuity
• A payable-on-death account
• A transfer-on-death investment account
• An employee death benefit

The donor may name:

• One charity as the sole beneficiary
• Several charities
• A charity for a stated percentage
• Family members and a charity together
• A charity as contingent beneficiary

Beneficiary forms should clearly identify the organization and percentages.

The designation should also be coordinated with:

• The will
• The trust
• Family obligations
• Spousal rights
• Tax consequences
• The organization's ability to accept the asset

A charitable beneficiary designation may be easier to update than a will, but it should not be treated casually.

Request confirmation that the provider accepted the designation.

Retirement assets may receive different tax treatment from other inherited property.

Because many retirement distributions are potentially taxable to individual beneficiaries, some donors consider leaving part of a retirement account to a qualified charity while leaving other assets to family members.

However, the appropriate arrangement depends on:

• The type of account
• The donor's age
• The beneficiary
• Spousal protections
• Required distributions
• The donor's overall estate
• The charity's eligibility
• The intended percentages
• Federal and state tax rules

Do not assume that the same asset is equally suitable for every beneficiary.

Retirement-account beneficiary planning should be coordinated with legal, tax, retirement-plan, and financial professionals.

A qualified charitable distribution, or QCD, is generally an otherwise taxable distribution paid directly from an eligible IRA to a qualified charity for an IRA owner who is at least age 70½.

A qualifying QCD may satisfy all or part of the IRA owner's required minimum distribution.

For 2026, the aggregate QCD exclusion limit is $111,000 per eligible individual, adjusted from $108,000 for 2025.

Important requirements and limitations apply:

• The funds generally must be transferred directly from the IRA to the eligible charity.
• The age requirement remains 70½, even though the general required-minimum-distribution age may be later.
• Not every IRA arrangement or charitable recipient qualifies.
• The QCD amount is generally not also claimed as an itemized charitable deduction.
• Proper tax reporting and acknowledgment are still important.
• Different limits and rules may apply to certain one-time split-interest gifts.

A withdrawal paid to the IRA owner and later donated may not receive the same QCD treatment as a direct transfer.

Because the annual limit and related rules can change, verify current information before initiating the transfer.

A donor-advised fund, commonly called a DAF, is generally a separately identified charitable account maintained and operated by a sponsoring Section 501(c)(3) organization.

After the donor contributes to the fund:

• The sponsoring organization has legal control over the contribution.
• The donor generally retains advisory privileges regarding investments and grants to eligible charities.
• The contribution is irrevocable.
• Grants are later recommended from the fund to charitable organizations.

The donor is advising—not continuing to own—the donated assets.

A donor-advised fund may help someone:

• Organize charitable giving
• Make grants to several charities
• Involve family members
• Contribute in one year and recommend grants later
• Donate certain appreciated assets
• Maintain records through one sponsoring organization
• Create a family-giving tradition

Before opening a fund, review:

• Minimum contribution requirements
• Administrative and investment fees
• Available investment options
• Grant minimums
• Successor-adviser rules
• Permitted charitable recipients
• Policies for inactive accounts
• How the sponsoring organization handles assets after the donor's death
• Whether a beneficiary charity may be named

A donor cannot use a DAF to reclaim contributed assets or receive improper personal benefits. The IRS warns against arrangements that create questionable deductions or impermissible economic benefits for donors and their families.

A private foundation and donor-advised fund are not the same.

A donor-advised fund is operated by a sponsoring public charity, while a private foundation is usually a separate legal charitable organization with its own governance, reporting, administrative, and compliance responsibilities.

A private foundation may provide greater formal control and visibility, but it may also involve:

• Formation expenses
• Annual tax filings
• Governance requirements
• Recordkeeping
• Investment management
• Minimum-distribution rules
• Restrictions on transactions
• Excise-tax considerations
• Legal and accounting expenses
• Ongoing administration

A family should not create a private foundation merely because the name sounds prestigious.

The structure should be justified by the planned assets, charitable mission, desired involvement, cost, and long-term willingness to administer it.

A charitable remainder trust is an irrevocable trust into which a donor transfers assets.

The trust generally:

• Pays income to one or more noncharitable beneficiaries for life or a specified term
• Transfers the remaining property to one or more qualified charities when the payment period ends

The charitable remainder must meet federal requirements, and the donor may qualify for a partial charitable deduction based on the value of the charitable interest. The trust requires ongoing tax reporting and administration.

A charitable remainder trust may be considered when someone wants to:

• Make a significant charitable gift
• Retain an income stream
• Contribute appreciated property
• Coordinate charitable and family goals
• Create a structured long-term plan

It is not a simple bank account.

The trust is irrevocable, the assets cannot simply be reclaimed, beneficiaries may owe tax on distributions, and improper transactions can create serious consequences.

A charitable lead trust generally works in the opposite order from a charitable remainder trust.

The charity receives payments for a stated period, after which the remaining trust property may pass to noncharitable beneficiaries, such as family members.

The IRS categorizes charitable lead trusts as split-interest trusts because both charitable and noncharitable beneficiaries have interests in the property.

Charitable lead trusts may involve:

• Gift and estate-tax considerations
• Complex valuation
• Irrevocable transfers
• Investment risk
• Trust administration
• Required filings
• Family transfer planning

These trusts require specialized legal, tax, and financial analysis.

They are not appropriate do-it-yourself arrangements.

Religious giving may include:

• Tithes
• Offerings
• Building funds
• Mission support
• Scholarships
• Clergy support
• Community outreach
• Memorial gifts
• Bequests

Churches that meet Section 501(c)(3) requirements are generally treated as tax-exempt without being required to apply formally for recognition from the IRS. Therefore, an eligible church may not appear as a separate organization in the IRS search tool.

Still, donors should confirm:

• The church's legal identity
• Which account receives the funds
• Whether the local congregation is covered by a larger organization's exemption
• Whether a restricted gift can be honored
• Whether a building or scholarship fund is formally administered
• Whether receipts will be provided
• What happens if the congregation closes or merges

For a bequest, do not name only the current pastor or leader.

Name the legal religious organization and include appropriate backup instructions.

Diaspora families often want to support:

• Schools in their home country
• Churches
• Hospitals
• Community projects
• Village associations
• Orphanages
• Scholarship programs
• Disaster relief
• Family-development projects

A direct contribution to a foreign organization is generally not deductible as a U.S. federal charitable contribution, subject to limited treaty-based exceptions involving certain organizations in Canada, Mexico, and Israel.

A contribution to a qualified U.S. charitable organization that performs work abroad may be deductible when the U.S. organization retains full control and discretion over the donated funds.

Do not assume that:

• Registration as a nonprofit in another country creates U.S. deductibility
• A U.S. bank account makes the organization a U.S. charity
• A social-media fundraiser qualifies
• A U.S. charity may act as a mere conduit for a specifically named foreign recipient
• A family transfer becomes deductible because the funds support a good cause

International charitable giving may also involve anti-fraud, banking, currency, sanctions, and reporting considerations.

Verify both the organization and the transfer method.

An unrestricted gift allows the charity to use the contribution where it determines the need is greatest.

A restricted gift directs funds to a particular purpose, such as:

• A scholarship
• A building project
• Medical equipment
• A named program
• Research
• A community initiative
• A geographic location

Restricted gifts can help fulfill a donor's specific vision, but restrictions may also create problems when:

• The program ends
• The project becomes impossible
• The organization changes its mission
• The gift is too small to administer separately
• The restriction becomes outdated
• The named beneficiary group no longer exists
• The organization merges or closes

Before imposing a restriction:

• Discuss it with the charity.
• Confirm the organization will accept it.
• Define the purpose clearly.
• Include an alternative if the original purpose becomes impossible.
• Avoid excessive detail that prevents practical use.
• Document the agreement properly.

A donor should distinguish between a clear charitable purpose and an attempt to control the organization forever.

Some donors want a building, scholarship, program, room, or fund named after:

• The donor
• A parent
• A spouse
• A child
• A family
• A respected community member

Before relying on a naming arrangement, clarify:

• Whether recognition is temporary or permanent
• The minimum gift required
• What happens if the building is replaced
• What happens if the program ends
• Whether the organization may remove the name
• What conduct or reputational provisions apply
• Whether the agreement is legally binding
• Whether the gift will be returned if recognition ends

Do not rely only on a verbal promise when recognition is an important condition of a substantial gift.

Before making a major contribution, review more than the organization's emotional appeal.

Consider:

• Legal and tax status
• Mission
• Leadership
• Governance
• Financial statements
• Form 990 filings when available
• Programs and results
• Administrative expenses
• Fundraising practices
• Conflicts of interest
• Privacy policies
• Donor restrictions
• Complaints or enforcement matters
• Whether the organization can accept the proposed asset
• Whether it operates where it claims to operate

The IRS search tool can help confirm tax status and provide access to certain filings, but tax-exempt status alone does not prove that the organization is effective or aligned with the donor's values.

For significant gifts, donors may also speak directly with:

• Organizational leadership
• Program staff
• Board members
• Existing donors
• Legal counsel
• Tax professionals
• Independent evaluators

Fraudulent fundraising may increase after:

• Natural disasters
• Wars
• Medical emergencies
• Community tragedies
• High-profile deaths
• Holiday seasons
• Viral social-media stories

Warning signs may include:

• Pressure to give immediately
• Requests for gift cards or cryptocurrency
• Refusal to provide a legal organization name
• A name designed to resemble a well-known charity
• No written acknowledgment
• Requests for personal banking credentials
• Emotional pressure combined with little verifiable information
• A payment link sent from an unfamiliar account
• Promises of guaranteed tax deductions
• Refusal to explain how funds will be used

Verify the organization independently rather than relying only on a link sent by text, email, or social media.

A person may want to:

• Help relatives
• Pay school fees
• Support a family business
• Provide medical assistance
• Help rebuild a relative's home
• Send funds to a village project

These transfers may be generous and valuable.

However, they are not automatically charitable contributions for U.S. tax purposes.

Keep family support, personal gifts, business investments, loans, and charitable donations clearly documented and financially separated.

This distinction helps with:

• Tax reporting
• Estate accounting
• Family expectations
• Loan repayment
• Business ownership
• Charitable receipts
• Recordkeeping

Not every act of generosity belongs in the same legal or tax category.

A family charitable plan can help teach younger generations about:

• Generosity
• Stewardship
• Community responsibility
• Financial decision-making
• Researching organizations
• Evaluating impact
• Working together
• Respecting different priorities

Family members may:

• Select a charity together
• Divide a yearly giving budget
• Volunteer
• Research organizations
• Recommend grants from a donor-advised fund
• Create a memorial project
• Support a scholarship
• Participate in annual giving meetings

Avoid making the experience only about tax savings.

Ask younger family members:

• Which issue matters to you?
• What change do you hope to create?
• How did you evaluate the organization?
• How will we know whether the gift helped?
• Should we give money, time, expertise, or all three?

The goal is to build thoughtful generosity—not merely distribute funds.

Family members may be surprised when part of an estate is directed to charity.

Explain:

• Why the cause matters
• Whether the gift is part of a lifelong giving pattern
• Which assets are intended for charity
• Whether the gift affects family property
• Whether a donor-advised fund or trust exists
• Who will administer the charitable arrangement
• Whether the family will have an ongoing role
• What the charity is expected to accomplish

You might say:

"This organization helped shape my life, and I want part of what I built to continue supporting that mission."

A charitable gift should not be used as a secret final punishment toward family members.

Its purpose should be generosity and impact—not unresolved conflict.

Before finalizing a charitable gift, consider whether the plan adequately addresses:

• A surviving spouse
• Minor children
• Dependents
• A beneficiary with a disability
• Housing
• Debts
• Healthcare
• Business obligations
• Taxes
• Funeral expenses
• Estate-administration costs

Charitable intent and family responsibility do not have to compete.

A coordinated plan may use:

• Percentages
• Contingent gifts
• Life insurance
• Separate assets for different beneficiaries
• A trust
• A charitable beneficiary designation
• A gift that becomes effective after a surviving spouse's death
• A combination of lifetime and testamentary giving

The plan should reflect both generosity and practical responsibility.

• Which causes matter most to me?
• What do I want my gift to accomplish?
• Can I afford to make the gift during my lifetime?
• Would a gift at death be more appropriate?
• Is the organization legally and financially qualified?
• Can the organization accept the asset I plan to give?
• Should the gift be restricted or unrestricted?
• What happens if the organization merges or closes?
• Have I correctly identified the organization?
• Will I receive anything of value in return?
• What records must I keep?
• Will the gift require an appraisal or Form 8283?
• Am I considering appreciated property?
• Could a beneficiary designation support the plan?
• Am I eligible for a qualified charitable distribution?
• Would a donor-advised fund serve my goals?
• Is a charitable trust truly necessary?
• Is the organization located outside the United States?
• Have I protected my own retirement and healthcare needs?
• Have I considered my spouse, dependents, and family obligations?
• Does my family understand the purpose of the gift?
• When should the charitable plan be reviewed?

• Charitable giving should begin with purpose, not merely tax considerations.
• Protect your own financial security before making substantial lifetime gifts.
• Confirm the organization's legal identity and eligibility.
• Direct gifts to individuals generally are not deductible charitable contributions.
• Cash and noncash donations require appropriate documentation.
• Donated property may require Form 8283 and a qualified appraisal.
• Beneficiary designations can support charitable legacy goals.
• Eligible IRA owners may use qualified charitable distributions under specific rules.
• Donor-advised fund assets are legally controlled by the sponsoring organization.
• Charitable trusts are complex, often irrevocable arrangements.
• Direct contributions to foreign organizations generally do not qualify for U.S. charitable deductions.
• Restricted gifts should be discussed with the organization before they are finalized.
• Charitable plans should be coordinated with family obligations, estate documents, and beneficiary forms.
• Tax laws and annual limits should be verified before acting.

Create a Charitable Legacy Plan.

Your first charitable-planning question should not be:

"How large should the gift be?"

Begin with:

"What do I want my generosity to continue accomplishing after I am gone?"