As year-end approaches, charitable giving can become an important part of the broader tax-planning conversation for Southern California Edison employees and retirees.
The key is not simply whether you plan to give, but how you give.
Depending on your age, income, account types, and charitable goals, different strategies may produce different tax results. Some individuals may benefit from making cash contributions. Others may want to consider appreciated investments, donor-advised funds, or Qualified Charitable Distributions from an IRA.
Beginning in 2026, the federal tax rules around charitable giving also changed. Taxpayers who do not itemize may now be able to deduct up to $1,000 of qualifying cash contributions, or $2,000 for married couples filing jointly, subject to applicable rules. At the same time, itemizers are subject to a new 0.5% of adjusted gross income floor before charitable contributions begin generating an itemized deduction.
For SCE employees approaching retirement, charitable planning may also intersect with Roth conversions, Required Minimum Distributions, investment gains, and overall retirement income.
The objective is not to give simply for a tax benefit. It is to make sure charitable gifts you already intend to make are coordinated thoughtfully with the rest of your financial plan.
Start With Your Charitable Goals
Before considering tax strategies, start with a simpler question:
What organizations or causes do you actually want to support?
Tax planning should generally come second.
Once your charitable priorities are clear, you can begin evaluating whether one giving method may be more efficient than another.
For some families, that may mean writing checks directly to charities before year-end.
For others, it may mean donating investments rather than cash or using retirement account assets.
The appropriate strategy depends heavily on the individual’s circumstances.
Cash Contributions May Be More Valuable in 2026
One of the biggest changes beginning in 2026 is that certain taxpayers who do not itemize deductions may still receive a federal deduction for qualifying cash contributions.
Under current rules, eligible individuals may deduct up to $1,000 of qualifying cash gifts, or $2,000 for married couples filing jointly, even if they take the standard deduction.
That makes year-end charitable giving potentially more relevant for households that historically received no federal tax benefit because they did not itemize.
However, the rules are specific.
The contribution generally must be made in cash to an eligible charitable organization. Certain gifts, including contributions to donor-advised funds, do not qualify for this particular non-itemizer deduction.
Key Question
If you normally take the standard deduction, could your planned year-end cash gifts qualify for the new 2026 deduction?
Itemizers Should Be Aware of the New Charitable Deduction Floor
The rules also changed for taxpayers who itemize.
Beginning in 2026, charitable contributions generally must exceed 0.5% of adjusted gross income before they begin generating an itemized charitable deduction.
That means someone who makes relatively modest annual gifts may receive less tax benefit than under prior rules.
For some households, this may create a reason to evaluate whether charitable contributions should be grouped into a larger gift in one year rather than spread evenly across several years.
This is sometimes referred to as bunching charitable contributions.
The strategy is not appropriate for everyone, but it may be worth discussing with a tax professional if you already plan to give consistently over time.
Consider Donating Appreciated Investments
If you own investments in a taxable account that have appreciated significantly, donating those assets directly to a qualified charity may be worth evaluating.
In many situations, donating appreciated securities can potentially provide two benefits:
- Avoiding realization of the capital gain that would have occurred if the investment were sold
- Potentially receiving a charitable deduction based on the asset’s value, subject to applicable tax rules and limits
The IRS generally permits deductions for contributions of property to qualified organizations, although the amount and limitations depend on the type of property and the charity receiving it.
This strategy can sometimes be especially useful for SCE employees who have accumulated concentrated or highly appreciated investments over many years.
However, tax consequences, holding periods, portfolio implications, and charitable deduction limits should all be reviewed before transferring assets.
Key Question
If you already intend to give to charity, would donating appreciated securities be more efficient than selling those investments and donating cash?
A Donor-Advised Fund May Help Organize Larger Gifts
A donor-advised fund, or DAF, is another charitable planning tool that some families use.
A donor contributes assets to a sponsoring charitable organization and may generally retain advisory privileges regarding future grants from the account. Once contributed, however, the sponsoring organization has legal control over the assets.
A DAF can be useful for someone who wants to make a larger charitable contribution in one year but distribute grants to individual charities over time.
This can sometimes work well with a bunching strategy.
For example, rather than making similar charitable contributions every year, a donor may contribute several years of intended giving into a DAF during a year when itemizing produces a greater tax benefit.
The individual can then recommend grants to charities over future years.
It is important to note that DAF contributions generally do not qualify for the new 2026 non-itemizer cash deduction.
Qualified Charitable Distributions Can Be Valuable for Older IRA Owners
For retirees age 70½ or older, Qualified Charitable Distributions may be particularly important.
A QCD generally allows an eligible IRA owner to direct money from an IRA directly to a qualifying charity.
When requirements are satisfied, the distribution may be excluded from taxable income and may also count toward an applicable Required Minimum Distribution.
Under 2025 IRS guidance, the QCD annual exclusion limit was $108,000 per eligible individual, and that amount is indexed over time.
For retirees who already plan to give to charity, this can potentially be more efficient than taking a taxable IRA distribution and then writing a separate check.
A QCD does not also generate a charitable deduction, because the qualifying distribution is excluded from income rather than deducted separately.
Key Question
If you are subject to RMDs and already give to charity, could a QCD help coordinate those two goals?
Charitable Giving Can Be Coordinated With Roth Conversions
For retirees evaluating Roth conversions, charitable planning can sometimes become part of the same tax discussion.
A Roth conversion generally increases taxable income in the year of conversion.
Depending on the individual’s circumstances, charitable contributions may help offset a portion of taxable income when deduction requirements are met.
That does not mean someone should increase charitable giving simply to offset a conversion.
The better approach is to coordinate charitable gifts that were already part of the financial plan with other taxable events occurring during the year.
This is another reason year-end tax planning should be viewed as a coordinated process rather than a collection of unrelated decisions.
Review Capital Gains Before Making a Gift
Year-end charitable planning should also consider investment gains.
If you expect to realize significant capital gains during the year, donating appreciated assets may become more attractive.
Conversely, if taxable income is unusually low, selling certain investments and donating cash may produce a different result.
There is no universal rule.
The best strategy depends on:
- Adjusted gross income
- Capital gains
- Whether you itemize
- The type of asset being donated
- Your charitable goals
- Other year-end tax transactions
Tax planning should therefore support the charitable plan rather than drive it.
Make Sure the Charity Qualifies
Not every gift is tax deductible.
The IRS generally requires contributions to be made to qualified organizations in order to receive a charitable deduction. Gifts directly to individuals, including certain personal fundraising efforts, are generally not deductible.
The IRS provides a Tax Exempt Organization Search tool to help taxpayers confirm whether an organization is eligible to receive tax-deductible contributions.
Good recordkeeping is also important.
Receipts, acknowledgments, and documentation requirements may vary depending on the amount and type of gift.
Timing Matters at Year-End
Charitable gifts generally must be completed within the tax year in order to qualify for that year’s deduction.
The IRS notes that contributions must actually be made before the close of the tax year to be deductible for that year.
That makes timing especially important for non-cash gifts, donor-advised fund contributions, and transfers of appreciated securities.
These transactions can require additional processing time.
Waiting until the final business day of December can create unnecessary risk that the contribution is not completed when intended.
Common Year-End Charitable Planning Mistakes
Giving Only for the Tax Deduction
The charitable goal should come first. Tax planning can help make an intended gift more efficient.
Automatically Writing a Check
Cash may be appropriate, but appreciated investments or IRA assets may sometimes provide a more tax-efficient source.
Assuming Every Donation Is Deductible
The recipient must generally be an eligible charitable organization, and documentation requirements apply.
Forgetting the New 2026 Rules
Non-itemizers may now receive a limited deduction for certain qualifying cash gifts, while itemizers face a new 0.5% AGI floor.
Waiting Too Long
Non-cash transfers and other charitable strategies may require time to complete before year-end.
Looking at Charitable Giving Separately From Tax Planning
Giving decisions may interact with capital gains, Roth conversions, RMDs, and overall taxable income.
A Year-End Charitable Planning Checklist
Before December 31, consider whether you have reviewed:
- Which charities you want to support
- Whether you expect to itemize deductions
- Whether the new non-itemizer deduction may apply
- The 0.5% AGI floor for itemized charitable deductions
- Appreciated securities in taxable accounts
- Whether a donor-advised fund is appropriate
- QCD eligibility if you are age 70½ or older
- Required Minimum Distributions
- Capital gains
- Roth conversions
- Documentation requirements
- Whether gifts can be completed before year-end
The objective is not to use every available strategy.
It is to determine whether the way you give can be improved while still supporting the causes that matter to you.
Frequently Asked Questions
Can I deduct charitable gifts if I do not itemize?
Beginning in 2026, eligible taxpayers may generally deduct up to $1,000 of qualifying cash contributions, or $2,000 for married couples filing jointly, even if they do not itemize. Restrictions apply.
Should I donate cash or appreciated stock?
The answer depends on the asset, your tax situation, and your charitable goals. Donating appreciated securities may allow some taxpayers to avoid realizing capital gains while potentially receiving a charitable deduction, subject to applicable rules.
What is a donor-advised fund?
A donor-advised fund is an account maintained by a sponsoring charitable organization. Donors contribute assets and may generally recommend future grants to charities, while the sponsoring organization retains legal control of the assets.
What is a Qualified Charitable Distribution?
A QCD generally allows an eligible IRA owner age 70½ or older to transfer funds directly from an IRA to a qualifying charity. When requirements are satisfied, the distribution may be excluded from taxable income and may count toward an RMD.
Do charitable gifts have to be completed by December 31?
Generally, contributions must be completed during the tax year to qualify for a deduction for that year.
Final Thoughts
Year-end charitable planning is ultimately about aligning two goals: supporting the organizations that matter to you and making thoughtful financial decisions about how those gifts are made.
For Southern California Edison employees and retirees, charitable giving may intersect with investment gains, Roth conversions, Required Minimum Distributions, and the broader retirement income plan.
At Guardian Financial Partners, we believe these decisions are most useful when they are considered together.
The goal is not simply to create a tax deduction. It is to make intentional decisions that support your values while helping you preserve your assets and protect your lifestyle.
About the Author
Casey S. Bartels, CFP® is a Founding Partner of Guardian Financial Partners. Since 2007, Casey and his partners have worked with Southern California Edison employees and executives, helping them navigate retirement planning, tax planning considerations, charitable giving strategies, and other important financial decisions.
Educating Edison is our educational series designed to help Southern California Edison employees better navigate their financial lives.
Guardian Financial Partners is not affiliated with, endorsed by, or sponsored by Southern California Edison. The content presented in the Educating Edison series is for educational purposes only and is not intended as individualized investment, tax, legal, or charitable planning advice. Tax laws, charitable deduction rules, retirement account provisions, and contribution limits are subject to change. Individuals should consult appropriate financial, tax, and legal professionals regarding their specific circumstances.
