Want to Give More Without Spending More? Here’s How!
Charitable giving ramps up this time of year. For many retirees, it’s one of the most meaningful parts of their financial life, but the way you give can dramatically change the impact you make.
The good news?
You don’t necessarily need to donate more money to increase the benefit you and the charity receive.
Sometimes it’s simply about using the right strategy at the right time.
So, in the spirit of the holidays and accomplishing this very objective, here are several ways retirees and near-retirees can maximize their charitable impact, without increasing the dollars leaving their bank account.
1. Bunching Charitable Gifts Through a Donor-Advised Fund (DAF)
One of the most effective ways to “give more without giving more” is to bunch multiple years of charitable contributions into a single tax year, especially in years when your income is higher than normal.
A donor-advised fund is very convenient and effective way to do this.
Here’s how it works:
You contribute several years’ worth of giving to a DAF in one year.
You receive a large single-year tax deduction, which can be especially valuable in peak-income years (RSUs, bonuses, business sales, Roth conversions, etc.).
You avoid the capital gains tax you’d owe if you sold the asset yourself.
You then grant (gift) the money out of the DAF slowly over time, according to your normal giving schedule.
✅ You get the upfront tax benefit.
✅ You forego future capital gains tax on appreciated stock contributed.
✅ Your charities get consistent support.
✅ Everyone wins!!!
This is one of the most powerful tools for high-impact giving, particularly for those who are charitable but don’t necessarily itemize every year.
Example:
Let’s say a 60 year-old couple normally gives $5,000 per year to charity.
They’re generous, but like 90% of Americans, their other itemized deductions don’t exceed the standard deduction.
Here’s their typical itemized deduction breakdown:
$10,000 in state and local taxes (capped at $10,000 for SALT)
$7,000 in mortgage interest
$3,000 in other deductions
$5,000 in charitable giving
Their total itemized deductions are $25,000, far below the 2025 standard deduction (currently over $31,500 for married couples filing jointly).
So even though they give $5,000 annually, there’s effectively no tax benefit because they end up taking the standard deduction anyway.
Now let’s say one spouse has a higher-income year due to a bonus, receiving stock, selling a rental, a Roth conversion, etc.
Instead of donating $5,000 as usual, they decide to contribute five years of giving ($25,000) into a donor-advised fund this year.
What happens now?
Their itemized deductions jump to:
$10,000 SALT
$7,000 mortgage interest
$3,000 other
$25,000 DAF contribution
= $45,000 total
Now their itemized deductions exceed the standard deduction by $13,500, giving them a large single-year deduction right when it matters most, during a high-income year.
They still gift $5,000 per year to their charities, just like always, but now it comes from their DAF account.
But by bunching the giving into one year:
They get a large single-year tax deduction for the first time.
They forego having to pay future capital gains tax on investment sales.
They grant the funds out to charity slowly.
Their giving remains consistent.
Their tax benefit is maximized in a year when the deduction is most valuable.
How cool!
3. QCDs for Retirees Over Age 70½
If you’re 70½ or older, you can make Qualified Charitable Distributions (QCDs) directly from your IRA to qualified charities.
And they come with major benefits:
QCDs do not count as taxable income.
They count toward your Required Minimum Distribution (RMD).
They help reduce AGI, which can lower Medicare premiums and prevent IRMAA.
They work even if you don’t itemize deductions,
For retirees who don’t need to spend all of their RMDs, QCDs are often the most tax-efficient giving strategy available.
It’s one of the rare situations where you can reduce taxes and give more at the same time.
Example:
Imagine a retiree named Susan who is 72 and has a Required Minimum Distribution (RMD) of $30,000 for the year.
She doesn’t need the full $30,000 for spending and has been giving $6,000 per year to her favorite local charities anyway.
If she takes the full RMD into her checking account:
The entire $30,000 shows up as taxable income
Her AGI increases
And that higher AGI could push her into higher Medicare premiums (IRMAA)
Instead, she sends $6,000 directly from her IRA to charity as a Qualified Charitable Distribution (QCD).
Here’s what changes:
The $6,000 counts toward her RMD.
The $6,000 doesn’t count as taxable income.
Her AGI stays lower.
She still gives the same amount to the charity.
She gets tax efficiency even if she doesn’t itemize.
The remaining $24,000 of her RMD can still come to her, but she has now made part of her required distribution more tax-efficient.
The Non-Itemizer Charitable Deduction & New OBBBA Provisions
Beginning in 2026, charitable giving becomes even more beneficial for households that take the standard deduction, thanks to the One Big Beautiful Bill Act (OBBBA).
Here’s what’s changing:
Non-itemizers can deduct more than before
Even if you don’t itemize, you can now claim deduction of cash contributions:
$1,000, if single
$2,000, if married filing jointly
This is a helpful shift.
For years, non-itemizers received no tax benefit at all for charitable giving. Now even smaller, consistent donations can receive modest tax treatment.
A new 0.5% AGI floor for itemizers
For those who do itemize, OBBBA introduces a 0.5% AGI floor:
The first 0.5% of AGI given to charity is not deductible
Amounts above that are deductible, subject to normal AGI limits
For most retirees who give consistently, this floor is minor and easily cleared.
Higher AGI limits allow larger deductions
OBBBA also expands the charitable AGI limits:
Cash contributions deductible up to 75% of AGI (previously 60%)
Appreciated securities deductible up to 30% of AGI
These higher limits create more flexibility in higher-income years or during one-time planning events.
Whether you itemize or not, OBBBA gives retirees more ways to receive tax benefits for charitable giving.
Give Smarter, Not Harder
Charitable giving doesn’t need to be complicated.
You don’t have to give more to make a bigger difference. You just need the right tools.
With a little planning, your generosity can:
Stretch further
Reduce your taxes
Lower your future Medicare costs
And support the people and organizations you care about most
Smart giving is simply thoughtful giving, and it allows your generosity to have a bigger impact without requiring a bigger budget.
Have any questions about what you’ve read? Let’s talk about them!
Read My Other Work!
