Establish a Tax-Smart Giving Tradition

For many families, this time of year is a chance to reflect on values. The recent government shutdown and its ripple effects—furloughs, delayed paychecks and withheld SNAP benefits—prompted a wave of generosity. People are also stepping up donations of cash, appreciated assets, food and other essentials during these times of need. It’s a reminder that charitable giving isn’t just a financial strategy—it’s a way to model compassion and community involvement.

As the days grow shorter and we prepare for 2026, there’s a timely opportunity to help your charitable giving go further before 2025 is over. You may be able to support the causes you care about and boost your bottom line.

Giving as a Family Value

A powerful way to build a legacy of generosity is by enabling younger family members to take an active part in your giving. If you have a donor-advised fund (DAF—learn more here), consider allowing a child or grandchild to recommend a grant to a charity or cause that resonates with them. It’s a simple gesture that can spark meaningful conversations about values, community and impact.

If you need help finding an organization to give to, CharityNavigator.org is a handy resource. It allows you to search and compare nonprofits based on transparency, financial health and effectiveness—making it easier to choose organizations that align with your family’s values.

Whether you’re supporting food banks, disaster relief, education or the arts, giving together can be a way to connect across generations and make philanthropy a shared tradition.

Now, let’s review what makes these last few weeks of 2025 a good time to consider establishing that tradition.

Tax Laws Are Changing in 2026

Under the new One Big Beautiful Bill Act, charitable deductions will face limitations next year and beyond. Senior Director of Family Office Financial Planning Frank Sennott has his eyes on three key areas that could affect client giving strategies:

1. A new floor for deductions. Beginning in 2026, charitable gifts can only be claimed as itemized tax deductions to the extent they exceed 0.5% of your adjusted gross income (AGI). For example, if your AGI is $1 million, the first $5,000 of giving won’t count toward your itemized deductions.
2. Standard deduction vs. itemizing. If you take the standard deduction—which for married couples is currently $31,500—you’ll need to give more than the difference between your capped state and local tax (SALT) deduction and the standard deduction to see any tax benefit. Without a mortgage interest deduction, that gap could be $20,000 or more before charitable gifts begin to lower your taxes.
3. A cap on deduction value. Even when your gifts qualify, the tax benefit of your itemized deductions will be capped at 35 cents on the dollar. That’s below the current top federal marginal rate of 37%, meaning high earners will see less of a tax benefit from each dollar donated starting next year.

Why 2025 Is the Year To Act

These changes make the timing of gifts important if you also want to save on taxes and maximize the impact of your giving. For many high earners, 2025 presents a window to “load up” a donor-advised fund and lock in today’s more favorable deduction rules.

Here’s how that could work:

• Frontload your giving. By contributing several years’ worth of donations (“bunching”) to a DAF in 2025, you can secure the current higher deduction rates and avoid the new 0.5% AGI floor. You’ll still be able to recommend grants to your favorite charities over time, just as if you were making annual gifts. For example, say you bunch five years’ worth of giving this year and can afford to make a $250,000 donation to a DAF. At current rates, that could result in approximately $115,000 in combined federal tax savings.
• Maximize tax efficiency. Consider using appreciated stock or ETFs to fund your DAF. This strategy allows you to deduct the full fair-market value of the assets while avoiding capital gains taxes—making your giving even more efficient.
• Leverage qualified charitable distributions (QCDs). If you’re age 70½ or older, QCDs from your IRA can satisfy required minimum distributions and provide a direct charitable benefit without itemizing your taxes. This will potentially be more valuable as itemized deductions face new limits starting in 2026.

Planning Ahead

The new rules don’t eliminate the benefits of charitable giving, but they do shift the landscape. For high-income donors, especially those who itemize, the difference between giving in 2026 versus 2025 could mean tens of thousands of dollars in lost deductions.

If you’re considering a significant gift—or even just want to make sure your regular giving continues to be tax-smart—now is the time to talk strategy. We’re here to help you think through the options, run the numbers, and make sure your generosity continues to benefit both your causes and your financial plan.

Let’s make 2025 a year of meaningful impact.