Create a Charitable Giving Plan That Helps You Give Back

What is a charitable giving plan?

How to create a charitable giving plan

Creating a giving plan doesn’t need to be complicated. A few simple steps can help you better define your priorities, set a budget and choose the best ways to give back.

Identify what matters most to you

A strong starting place when creating a charitable giving plan is to think about what causes, organizations and issues mean the most to you—and why:

• Community needs
• Organizations they trust
• Support for long-term change
• Passing values on to future generations

Whether you feel strongly about education, healthcare, environmental efforts, youth programs, animal welfare, food security, the arts or local community initiatives, defining what you care about helps focus your giving and brings purpose to every contribution.

If you still aren’t sure where to begin, consider starting locally. Supporting organizations that directly impact the community where you live and work can be particularly meaningful.

Charity Navigator is a good source for comprehensive information on nonprofits as well as tools to help you decide where to give.

Set a budget for charitable giving

Once you’ve identified your cause, the next step is to determine how much you want to give. A giving budget can be a percentage of your income, a fixed annual amount, a flexible range depending on circumstances or a mix of monetary gifts, time spent volunteering and donations. Ultimately, setting a budget helps you stay consistent and ensures your giving works within your financial plan.

You don’t need a large budget to make an impact. Even small, consistent contributions can support long-term change. If you prefer to give through volunteering, you can also factor volunteer time and personal involvement into your plan as well.

Choosing how you want to give back

There are several options for supporting the causes you care about. You can even combine them in a way that works best for you.

• One-time donations made throughout the year
• Recurring monthly giving for steady support to a cause
• Volunteering your skills or time to local organizations
• In-kind contributions such as clothing, supplies or food
• Community giving events like sponsoring school drives or neighborhood programs
• Legacy or planned giving by naming a charity in a will or estate plan

Some people also use donor-advised funds to manage contributions. These accounts let you set aside money for charitable giving over time and can be useful for long-term philanthropy planning.

However, these may not be necessary for building your effective giving plan. The primary goal should be to select methods that feel meaningful, sustainable and aligned with your personal values.

Researching organizations, charities and non-profits

Before donating, it’s important to first confirm that an organization is legitimate and uses contributions responsibly. Here are a few simple steps that can help you feel confident in your giving choices:

• Confirm tax-exempt status: The IRS Tax Exempt Organization Search allows you to verify whether a charity is a qualified 501(c)(3) organization eligible to receive tax-deductible donations.
• Review financial transparency: Annual reports and published financial statements should show how funds are used.
• Check impact reporting: Many organizations share stories, data or progress updates that highlight the difference donations make.
• Use trusted charity evaluators: Charity Navigator offers ratings and reports to help you make informed decisions.
• Be aware of potential scams: The FTC offers tips for recognizing misleading fundraisers and avoiding fraudulent solicitations.

Taking a few minutes to research can help ensure your contributions support trustworthy organizations that best align with your goals.

Tracking your charitable giving

Keeping track of your giving throughout the year can help you stay organized better understand your overall impact and review your goals. A simple spreadsheet can help you record the organizations you supported, the date and amount of each donation, receipts or letters of acknowledgement, proof of recurring gifts and any in-kind or volunteer efforts.

By tracking your charitable giving, you also make it easier to prepare for tax season.

Charitable giving and tax deductions

Depending on your situation, some charitable donations may be eligible for a tax deduction when filing year-end taxes. Here are a few general considerations to keep in mind:

• Donations usually must be made to a qualified 501(c)(3) charitable organization in order to be deductible.
• Cash donations and non-cash contributions (such as goods or property) may be deductible under certain conditions.
• You must keep records or receipts for contributions you plan to deduct.
• If you claim the standard deduction, your charitable contribution deductions may be limited.
• Deduction limits vary based on the type of donation and your adjusted gross income.

A general rule of thumb for deductions is to keep records of charitable contributions for a minimum of three years—the standard period of limitations in which the IRS can audit your return.

As a best practice, the recommendation is to keep all information surrounding charitable donations for seven years. The statute of limitations for an IRS audit is extended to six years if you fail to report more than 25% of your income. You have seven years to file a claim for a loss from worthless securities or a bad debt deduction. If you didn’t file a return, or filed a fraudulent return, there is no statute of limitations, and the IRS can audit you at any time.

Because everyone’s tax situation is unique, it’s important to review IRS guidelines or speak with a tax professional for personalized guidance.

How the One Big Beautiful Bill Act affects charitable giving

The One Big Beautiful Bill Act (OBBBA) includes several provisions that may impact charitable giving, deduction limits and recordkeeping rules moving into 2026. While the full legislation is extensive, the IRS provides a summary that outlines the provisions related to individual taxpayers, including how certain charitable deduction limits are treated.

One of the biggest updates to charitable giving established in the OBBBA is that people who take the standard deduction (not itemizers) will once again be able to deduct some cash donations to qualified charities. Single filers can deduct up to $1,000, and married couples filing jointly can deduct up to $2,000. This deduction only applies to cash gifts made directly to eligible charities, not to donor-advised funds or private foundations, and provides a nice tax incentive for those looking to give back.

For people who itemize deductions, there are two other changes.

• The tax benefit for charitable deductions will be capped at 35% for those in the highest tax bracket.
• There will be a new “floor” on deductions. Starting in 2026, itemizers can only deduct charitable gifts that are more than 0.5% of their adjusted gross income (AGI).
  
  For example, if your AGI is $300,000, only the portion of your donations above $1,500 would be deductible. Corporations will have a similar rule and can only deduct gifts above 1% of taxable income.

Together, these updates may change how some people and businesses choose to give. Again, speak with a tax professional to better understand how these new rules may apply to your specific situation.

Review and adjust your charitable giving plan every year

Your financial situation, goals and interests may change over time. An annual review of your giving plan can help confirm that it’s still reflecting your values and goals. It’s also an opportunity to adjust your budget, the organizations you support, and your giving timeline—and know you’re on track to make the greatest impact with your generosity.