Giving Tuesday Is One Day. Build a Giving Plan That Lasts All Year.

Picture a food bank on Giving Tuesday, December 1. Gifts pour in. By February the shelves and bank account run low, and staff are chasing donors who already feel tapped out.

Farmers solved this long ago. They don't count on one big storm; they fill a reservoir when the rain comes and water all season.

The 2026 tax rules favor fewer, larger, well-timed gifts, while charities still need steady checks. A reservoir handles both.

The 2026 rules at a glance

How the reservoir works

Take a hypothetical married couple: $400,000 of income, $20,000 a year of state taxes and mortgage interest, and $20,000 a year of gifts.

The new floor works like an insurance deductible. Each year, the first 0.5% of income in gifts ($2,000 here) doesn't count, and generally doesn't carry over. Give $20,000 three years running and you pay it three times. Only $18,000 of each gift counts, so $54,000 of the $60,000. Put the same $60,000 into a donor-advised fund in one year and you pay it once: $58,000 counts.

But the bigger effect comes from the standard deduction ($32,200 married in 2026). You get the larger of that or your itemized total. Never both.

That's $28,400 more in deductions ($142,400 minus $114,000), worth about $6,800 in this couple's 24% bracket. And the charities still get $20,000 every year. The fund sends grants in years 2 and 3, and those aren't deducted again; you got the deduction when you filled the fund. In off years, cash given directly to charity, outside the fund, earns up to $2,000 more on top of the standard deduction.

Two cautions. Money in a donor-advised fund can't come back out (you recommend grants, the sponsor decides, and fees apply). And plan to empty each deposit within two or three years; a reservoir that never drains helps no one.

A big-bonus year makes a natural fill year. In a business-sale year, run the numbers first: the floor grows with income.

Age 70½ or older? Your IRA is usually the first bucket.

What to pour in

Beat donor fatigue with a calendar

Set a rhythm. Monthly or quarterly gifts (or fund grants) give charities income they can budget.

Name a charity on your traditional IRA. Heirs pay income tax on those dollars; a charity named on the beneficiary form doesn't.

Watch 2027. A federal credit of up to $1,700 for gifts to scholarship organizations starts where states opt in (no deduction on the same dollars).

Transfers and appraisals slow at year-end, so start 2026 gifts now.

Your next step

Ask your Composition Wealth advisor to sketch your expected income and giving for 2026 through 2028 on one page, starting with what you want your giving to do. We'll work through it with you and your CPA.

 

Composition Wealth, LLC (“Composition Wealth”) is a registered investment adviser. Advisory services are offered only to clients or prospective clients where Composition Wealth and its representatives are properly licensed or exempt from licensure. This communication is for general informational purposes only and should not be considered investment, financial, tax, or legal advice. It should not be treated as a solicitation to buy or sell securities and does not consider individual investment objectives, strategies, tax status, or horizon. Tax laws and regulations are complex and subject to change, and the tax treatment of any strategy or transaction depends on individual facts and circumstances. Please consult your own tax, legal and accounting advisors before making any related decisions.