Your Guide to Smart Charitable Giving
How Donor Advised Funds, Qualified Charitable Distributions, and Gifts of Appreciated Stock Can Maximize Your Impact and Minimize Your Tax Burden
Thank you for your generous support of All About Animals Rescue. Since 2005, donors like you have helped us sterilize over 450,000 cats and dogs, including nearly 100,000 community cats, and provide wellness care to 50,000 animals annually. Together we’re helping reduce the number of animals born to homelessness. Your commitment to our mission of No More Homeless Pets makes every bit of this possible.
We want to share some powerful giving strategies that can amplify your generosity while potentially saving you thousands of dollars in taxes. Whether you are considering a major gift, planning your retirement distributions, or looking to rebalance a portfolio, the tools described below can help you do more good for animals—and your bottom line.
Tax law changes under the One Big Beautiful Bill Act (OBBBA), effective January 1, 2026, make these strategies more valuable than ever. Read on to learn how.
Donor Advised Funds (DAFs)
What Is a Donor Advised Fund?
A Donor Advised Fund (DAF) is a charitable giving account that you establish at a sponsoring organization—most financial institutions can help in opening a DAF, consult your financial advisor or we are happy to make an introduction to professionals that can help! Think of it as a “charitable savings account.” You make an irrevocable contribution to the DAF, receive an immediate tax deduction, and then recommend grants to your favorite charities—including All About Animals Rescue—on your own timeline.
How Does It Work?
- Contribute cash, appreciated securities, or other assets to your DAF account.
- Claim your charitable tax deduction immediately—in the year of the contribution, not the year of the grant.
- Invest and grow the funds tax-free inside the DAF while you decide where to direct them.
- Recommend grants to All About Animals Rescue (or any qualified 501(c)(3) charity) whenever you are ready.
Tax Advantages of Using a DAF
- Immediate tax deduction: Deduct your full contribution in the year you fund the DAF—even if grants go out years later. Cash contributions are deductible up to 60% of your Adjusted Gross Income (AGI), and appreciated securities up to 30% of AGI, with a five-year carry-forward for any unused deduction.
- Eliminate capital gains tax: When you contribute long-term appreciated stock or mutual funds directly to your DAF, you avoid the capital gains tax you would owe if you sold those assets. This can increase the amount available for charity by up to 20%.
- Tax-free growth: Once in the DAF, your charitable dollars can be invested and grow free of income or capital gains taxes, compounding your philanthropic impact over time.
- “Bunching” strategy: Consolidate multiple years of charitable giving into a single tax year to exceed the standard deduction threshold ($15,000 single / $30,000 married in 2025). You itemize that year for the full benefit, take the standard deduction in subsequent years, and continue granting from your DAF to charities like All About Animals Rescue on your normal schedule.
Starting January 1, 2026, the One Big Beautiful Bill Act introduced a 0.5% AGI floor on all itemized charitable deductions—meaning only contributions above that threshold are deductible. For a household earning $200,000, the first $1,000 in donations provides no tax benefit. DAFs help you overcome this by bunching multiple years of giving into a single large contribution, clearing the floor with room to spare and maximizing your deduction. Additionally, for top-bracket taxpayers, the deduction benefit is capped at 35 cents per dollar (down from 37 cents). Planning a large DAF contribution now can lock in greater savings.
Donating Appreciated Stock
The Double Tax Advantage
If you hold stocks, mutual funds, or ETFs that have grown significantly in value, donating them directly—either to your DAF or straight to All About Animals Rescue—is one of the most tax-efficient ways to give. Here’s why:
- Avoid capital gains tax entirely. If you sold the stock yourself, you would owe federal capital gains tax of up to 20%, plus the 3.8% Net Investment Income Tax, plus any applicable state taxes. By donating the shares directly, that tax liability disappears completely.
- Deduct the full fair market value. Your charitable deduction is based on the stock’s current market value—not what you originally paid for it—provided you have held the asset for more than one year.
Example: Donating $50,000 in Appreciated Stock vs. Cash
| Sell Stock, Donate Cash | Donate Stock Directly | |
|---|---|---|
| Current market value | $50,000 | $50,000 |
| Original cost basis | $15,000 | $15,000 |
| Capital gains tax owed | $8,330* | $0 |
| Amount available for charity | $41,670 | $50,000 |
| Your charitable deduction | $41,670 | $50,000 |
| Additional tax savings at 35% | $14,585 | $17,500 |
*Assumes 23.8% combined federal capital gains + NIIT rate on $35,000 gain.
By donating appreciated stock directly to All About Animals Rescue (or to your DAF for a grant to us), you give $8,330 more to the animals, eliminate your capital gains tax, and receive a $17,500 deduction instead of $14,585. That is $2,915 in additional tax savings—plus $8,330 more for our spay/neuter and rescue programs.
To donate appreciated stock directly to All About Animals Rescue, please contact our Director of Development at cgarrett@allaboutanimalsrescue.org to obtain our brokerage transfer instructions.
Qualified Charitable Distributions (QCDs)
Tax-Free Giving from Your IRA
If you are age 70½ or older and hold a traditional IRA, a Qualified Charitable Distribution is one of the most powerful and underutilized giving tools available. A QCD allows you to transfer funds directly from your IRA to a qualified charity like All About Animals Rescue—completely tax-free.
2026 QCD Rules at a Glance
- Annual limit: Up to $111,000 per individual ($222,000 for married couples filing jointly)
- Age requirement: Must be 70½ or older at the time of distribution
- Eligible accounts: Traditional IRA, inherited IRA, or inactive SEP/SIMPLE IRA
- Direct transfer required: Funds must go directly from your IRA custodian to the charity—never through your personal account
- Satisfies RMDs: If you are 73 or older and subject to Required Minimum Distributions, your QCD counts toward your annual RMD requirement
Why QCDs Are So Powerful
- The QCD amount is completely excluded from your taxable income. Unlike a normal IRA withdrawal followed by a charitable gift (where you include the withdrawal in income and then deduct the donation), a QCD simply never appears as income. This is a direct exclusion, not a deduction.
- No itemization required. You benefit from a QCD whether you itemize or take the standard deduction—making it ideal for the approximately 90% of taxpayers who do not itemize.
- Lowers your AGI. A lower Adjusted Gross Income can reduce your Medicare premiums (IRMAA surcharges), decrease the taxable portion of your Social Security benefits, and limit exposure to the Net Investment Income Tax.
- Bypasses the new 2026 deduction limits. Because a QCD is an income exclusion (not a deduction), it is not subject to the new 0.5% AGI floor, the 35% deduction cap, or any itemization requirements under the OBBBA.
While both DAFs and QCDs are excellent charitable planning tools, they cannot be combined. QCDs must go directly to an operating 501(c)(3) public charity—like All About Animals Rescue. They cannot be directed to DAFs, private foundations, or supporting organizations. If you are 70½ or older and have IRA assets, consider directing your QCD directly to us while using your DAF for other charitable goals.
Which Strategy Is Right for You?
| Feature | Donor Advised Fund | QCD from IRA | Appreciated Stock |
|---|---|---|---|
| Best for | Itemizers wanting to bunch or time gifts | IRA holders 70½+ (itemizers or not) | Investors with long-held appreciated assets |
| Tax deduction | Immediate, full FMV | No deduction (income exclusion) | Full FMV deduction (30% AGI limit) |
| Capital gains | Eliminated if donating stock to DAF | N/A (IRA assets) | Eliminated completely |
| Itemization required? | Yes, to benefit | No | Yes, to benefit |
| Satisfies RMDs? | No | Yes | No |
| 2026 AGI floor? | Subject to 0.5% floor | Exempt | Subject to 0.5% floor |
| Annual limit | 60% AGI (cash) / 30% AGI (stock) | $111,000 per person | 30% AGI |
| Can direct to All About Animals? | Yes, via grant recommendation | Yes, directly | Yes, directly or via DAF |
Many of our most generous supporters use multiple strategies together. For example: use a QCD to satisfy your RMD and support All About Animals directly, while also contributing appreciated stock to your DAF for bunched deductions in a single tax year. Work with your financial advisor or tax professional to build a giving plan tailored to your situation.
Make Your Gift to All About Animals Rescue
Every dollar saves lives. Every smart giving strategy stretches your impact further.
| Tax ID (EIN) | 20-3006686 |
| Legal Name | All About Animals Rescue |
| Website | www.allaboutanimalsrescue.org |
| Donation Inquiries | cgarrett@allaboutanimalsrescue.org |
| Mailing Address | [Insert mailing address here] |
How to Direct Your Gift
DAF Grant
Search for “All About Animals Rescue” (EIN 20-3006686) in your DAF provider’s grant portal
QCD
Instruct your IRA custodian to send a check payable to All About Animals Rescue
Stock Gift
Contact us for DTC transfer instructions to our brokerage account
Your Gift at Work
Ready to Make a Difference?
Whichever strategy fits your situation, we’re here to help you give in the smartest way possible.
This information is provided for general educational purposes only and does not constitute legal, tax, or financial advice. Tax laws are complex and subject to change. The information herein reflects our understanding of provisions in effect as of February 2026, including changes under the One Big Beautiful Bill Act (OBBBA). Individual circumstances vary. Please consult your tax advisor, financial planner, or estate attorney before making charitable giving decisions to ensure compliance with current tax law and to evaluate how these strategies apply to your specific situation.
All About Animals Rescue is a 501(c)(3) nonprofit charitable corporation organized under the laws of the State of Michigan. EIN: 20-3006686. Donations are tax-deductible to the full extent allowed by law.
www.allaboutanimalsrescue.org | Tax ID: 20-3006686 | 501(c)(3) Nonprofit