Qualified Charities: IRS Rules, AGI Limits, and Substantiation

Under IRS rules, a qualified charity is one that fits inside Section 170(c) of the Internal Revenue Code, and a donation to any other kind of organization produces no federal income tax deduction no matter how worthy the cause. Even when the charity qualifies, you only get the deduction if you itemize on Schedule A, keep the right paperwork, and stay within the annual percentage-of-AGI caps that the tax code sets on charitable giving.

Which Organizations Qualify Under Section 170(c)

The statute lists six categories of eligible recipients. The broadest one covers entities organized and operated for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. These organizations must be created under U.S. law, cannot let net earnings flow to private individuals, and cannot campaign for or against political candidates.¹ Most fit within Section 501(c)(3), which layers on matching restrictions: no substantial lobbying, no campaign intervention, no private benefit.²

The other five categories are narrower:

Federal, state, and local governments, but only when the gift is for an exclusively public purpose.
War veterans’ organizations, posts, and their auxiliaries, trusts, and foundations, organized in the United States.
Domestic fraternal societies operating under the lodge system, but only when the gift is earmarked for religious, charitable, scientific, literary, or educational uses.
Nonprofit cemetery companies operated exclusively for the benefit of their members.
Certain tax-exempt professional sports leagues, but only for contributions made for exclusively public purposes.

A donation must fit one of these six buckets to be deductible.¹

Public Charity or Private Foundation?

Within the 501(c)(3) universe, organizations divide into public charities and private foundations. Public charities draw substantial support from the general public or government grants and include churches, hospitals, universities, and most nonprofits people encounter. Organizations that fail the public-support test are classified as private foundations. Both are qualified recipients, but private foundations carry lower AGI percentage caps for the donor, so your deduction ceiling is smaller. The distinction matters most for large gifts.

How to Verify a Charity Before You Give

The IRS runs a free lookup tool called Tax Exempt Organization Search (TEOS) at irs.gov, where you can confirm an organization’s legal name, EIN, and current eligibility to receive deductible contributions.³ Checking TEOS before you write a check is the simplest safeguard for your deduction.

An organization that fails to file required annual returns for three consecutive years automatically loses its tax-exempt status by operation of statute. Contributions made after the revocation date are not deductible.⁴

The Church Exception

Churches, synagogues, mosques, and similar religious organizations that meet the 501(c)(3) requirements are automatically considered tax-exempt. They are not required to apply for IRS recognition and may never appear in TEOS. A donation to a qualifying church is still deductible even if the church has no determination letter and no TEOS listing.⁵ If a church appears on the automatic-revocation list because it never filed returns, that alone does not strip its exempt status, since it was never required to file in the first place.

Gifts That Don’t Produce a Deduction

Direct gifts to individuals are never deductible, even when the person is in genuine need. If you want a deduction, the money has to move through a qualified organization that controls how the funds are used.

Political contributions are the other major exclusion. Donations to political action committees, campaign funds, and organizations primarily engaged in lobbying do not qualify. These entities typically fall under Section 527 of the tax code, which permits no donor deductibility.⁶ Dues paid to labor unions and most fraternal organizations are also nondeductible unless specifically earmarked for the charitable purposes described above.

Quid pro quo situations reduce your deduction. If you pay $200 for a fundraising dinner and the meal is worth $75, only $125 is deductible. Any benefit you receive in return must be subtracted from the amount you claim. For contributions over $250, the charity is required to tell you whether it provided goods or services and give you a good-faith estimate of their value.⁷

Volunteered Time and Services

The fair market value of services you donate is never deductible, no matter how skilled the work. A lawyer who donates 20 hours of pro bono counsel cannot deduct the billable value of those hours. Unreimbursed out-of-pocket expenses tied directly to the charity’s work can be deductible, though: supplies, special uniforms not suitable for everyday wear, and travel costs, provided you keep records and itemize.

If you drive your personal vehicle for charity work, you can deduct 14 cents per mile. That rate is fixed by statute and doesn’t move with gas prices the way the business mileage rate does.⁸ You can instead deduct actual fuel costs. Depreciation, insurance, registration, and maintenance are off the table either way. Parking and tolls are deductible on top of the mileage rate.⁹

You Have to Itemize

Charitable contributions only reduce your taxes if your total itemized deductions exceed the standard deduction. For the 2026 tax year, the standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.¹⁰ With those thresholds so high, most taxpayers take the standard deduction and receive no tax benefit from charitable giving.

If your charitable gifts, mortgage interest, state and local taxes (capped at $10,000), and medical expenses above the AGI floor together fall short of the standard deduction, your donations have zero tax impact.

Bunching to Cross the Threshold

One workaround is “bunching.” Instead of donating the same amount each year, you concentrate two or three years of giving into a single tax year. In the bunching year, your itemized deductions clear the standard-deduction threshold and you claim the full charitable deduction. In the off years, you take the standard deduction. Donor-advised funds make this especially easy, since you can front-load a large contribution and then recommend grants to charities over time.

Substantiation: The Paperwork That Protects the Deduction

The IRS puts the burden of proof on the donor. Without documentation, the deduction is gone regardless of whether the organization qualifies.

For any cash donation, you need a bank record (canceled check, bank statement, or credit card statement) or a written receipt from the charity showing the organization’s name, the date, and the amount.⁷

A stricter rule takes over at $250. For any single contribution of $250 or more, you must obtain a written acknowledgment from the charity before you file your return (or by the filing deadline including extensions, whichever comes first). The acknowledgment must state the cash amount or describe the property donated, and it must disclose whether the charity gave you anything in return.¹¹ A vague thank-you letter without these details will not hold up in an audit.

Non-Cash Gifts

Property donations follow tighter rules because valuation is subjective. The general rule is that your deduction equals the property’s fair market value at the time of the gift. For appreciated assets you’ve held longer than one year, this means you can deduct the current value and never pay capital gains tax on the appreciation.

If your total non-cash deductions exceed $500, you must file Form 8283 with your return, including details on when you acquired each item and what you paid.¹² Skipping Form 8283 can wipe out the deduction entirely. Property donations above $5,000 also require a qualified appraisal, and the appraiser must sign Section B of Form 8283.¹³

Vehicles, Boats, and Aircraft

Special rules apply when you donate a vehicle, boat, or airplane worth more than $500. In most cases, your deduction is limited to the amount the charity actually receives when it sells the vehicle, not what you believe the vehicle is worth. The charity must send you Form 1098-C reporting the sale price and date, and you must attach that form to your return.¹⁴ No Form 1098-C, no deduction above $500.

Cryptocurrency

Cryptocurrency donations follow the same framework as other property. If you’ve held the digital asset for more than one year, your deduction equals the fair market value on the date of the gift, and no capital gains tax is due on the appreciation. If you’ve held it for one year or less, your deduction is limited to the lesser of your cost basis or the current fair market value.¹⁵ Crypto gifts over $5,000 require Form 8283 Section B and a qualified appraisal, the same as any other high-value property donation.¹³

Annual Percentage-of-AGI Limits

Even when the charity qualifies and your paperwork is clean, the tax code caps how much you can deduct in one year. The ceiling is a percentage of your adjusted gross income, and it depends on what you gave and who received it.

60% of AGI for cash contributions to public charities, including donor-advised funds. The One Big Beautiful Bill Act made this limit permanent.¹⁰
50% of AGI for non-cash contributions (other than capital gain property) to public charities, reduced by any cash already claimed under the 60% limit.¹⁶
30% of AGI for gifts to private foundations and certain other second-category organizations, and for capital gain property given to public charities when deducted at full fair market value.¹⁶
20% of AGI for capital gain property contributed “for the use of” (rather than directly “to”) a qualified organization.¹⁶

When gifts span multiple categories, the higher limits are applied first. Contributions above the applicable cap aren’t lost. Excess amounts carry forward and can be deducted over the next five tax years, subject to the AGI limits in each of those years.¹⁶ If a donor dies with unused carryover, the portion allocated to the deceased spouse cannot be used by the surviving spouse and expires with the final return.

Donor-Advised Funds

A donor-advised fund is a charitable giving account maintained by a sponsoring organization that holds 501(c)(3) status. You contribute cash or property to the fund, take the deduction in the year of the contribution, and then recommend grants to specific charities over time.¹⁷ Once the contribution is made, the sponsoring organization has legal control over the assets, though you keep advisory privileges over where the money goes. AGI limits match those for public charities: 60% for cash and 30% for appreciated property at fair market value.¹⁶

Qualified Charitable Distributions From an IRA

If you’re 70½ or older, you can transfer up to $111,000 in 2026 directly from a traditional IRA to a qualified charity. This qualified charitable distribution (QCD) is excluded from your taxable income entirely.¹⁸ Each spouse can make a separate $111,000 QCD if filing jointly, and the limit adjusts annually for inflation.

A QCD reduces adjusted gross income, which flows into lower Medicare premiums and reduced taxation of Social Security benefits. Standard charitable deductions only reduce taxable income after AGI is calculated, so a QCD often produces a better result for retirees even when they itemize. The transfer must go directly from the IRA custodian to the charity. Money that touches your bank account first will not qualify.

Two limits worth noting: QCDs cannot go to donor-advised funds or to most private foundations, and SEP and SIMPLE IRAs are excluded. The recipient must be an organization that would qualify for a standard deductible contribution under Section 170(c).¹⁹

1
Office of the Law Revision Counsel. 26 USC 170 – Charitable, Etc., Contributions and Gifts
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Office of the Law Revision Counsel. 26 USC 501 – Exemption From Tax on Corporations, Certain Trusts, Etc.
3
Internal Revenue Service. Tax Exempt Organization Search
4
Internal Revenue Service. Automatic Revocation of Exemption
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Internal Revenue Service. Churches, Integrated Auxiliaries and Conventions or Associations of Churches
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Internal Revenue Service. Nondeductible Lobbying and Political Expenditures
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Internal Revenue Service. Topic No. 506, Charitable Contributions
8
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate
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Internal Revenue Service. Providing Disaster Relief Through Charitable Organizations – Working With Volunteers
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Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
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Internal Revenue Service. Charitable Organizations – Substantiation and Disclosure Requirements
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Internal Revenue Service. Instructions for Form 8283 – Noncash Charitable Contributions
13
Internal Revenue Service. Instructions for Form 8283
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Internal Revenue Service. Form 1098-C – Contributions of Motor Vehicles, Boats, and Airplanes
15
Internal Revenue Service. Frequently Asked Questions on Virtual Currency Transactions
16
Internal Revenue Service. Publication 526 – Charitable Contributions
17
Internal Revenue Service. Donor-Advised Funds
18
Congressional Research Service. Qualified Charitable Distributions From Individual Retirement Arrangements
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Internal Revenue Service. Important Charitable Giving Reminders for Taxpayers