The holiday season always brings a mix of generosity and reflection — it’s the time of year when gratitude turns into action. But in 2025, charitable giving carries more weight than usual. This year isn’t just about feeling good; it’s about making smart tax moves before the rules change.

Here’s the thing: 2025 is shaping up to be the best year in recent memory for maximizing the tax benefits of your giving. That window narrows dramatically in 2026, when new rules are expected to introduce a charitable deduction “floor.” Let’s unpack what that means and how to give strategically while the opportunity’s still here.

Why 2025 Is a Pivotal Year for Charitable Giving

For decades, itemized charitable deductions have been a cornerstone of tax-efficient philanthropy. But starting in 2026, many proposals (including versions circulating in Congress and the Treasury’s analysis) call for a 0.5% floor on adjusted gross income (AGI). In plain terms: only the portion of your charitable contributions that exceeds 0.5% of your AGI would count toward your deduction.

For donors with steady giving habits — retirees, families funding donor-advised funds, or anyone who gives annually — that’s a subtle but meaningful hit to the value of their deductions. So, 2025 becomes something of a clear runway: a final year without a deduction floor, making it ideal for bunching or accelerating multi-year charitable plans.

If you’ve been thinking about a major gift, endowing a fund, or even frontloading your family’s giving for the next few years, now’s the time to consider it. By consolidating future gifts into 2025, you can capture the full deduction under today’s rules.

Donate Appreciated Securities Instead of Cash

Writing a check is easy — but it’s rarely the smartest way to give. A better strategy, especially for investors with taxable portfolios, is to donate appreciated securities directly.

Here’s how it works: If you’ve owned a stock, ETF, or mutual fund for more than a year, you can transfer the shares directly to a charity or donor-advised fund. You’ll generally receive a fair market value deduction for the full amount of the gift (subject to AGI limits), and you’ll avoid paying capital gains tax on the appreciation.

Let’s put numbers to it. Imagine you own $50,000 worth of stock that you bought years ago for $5,000. If you sold the shares, you’d owe capital gains tax on $45,000 of appreciation — roughly $6,750 at a 15% rate. Donating the shares directly instead allows you to skip the tax entirely and claim a charitable deduction for the full $50,000. That’s a win-win.

To make it work smoothly:

• Confirm that your chosen charity or donor-advised fund (DAF) can accept securities.
• Work with your custodian to complete the transfer forms early — settlement can take days or even weeks during December.
• Prioritize low-basis, long-held assets for maximum tax efficiency.

And don’t wait until the final week of the year; December 31 isn’t just a holiday deadline — it’s a hard one.

Use a Donor-Advised Fund (DAF) for Flexibility

DAFs have become the go-to charitable tool for investors who want to be thoughtful but tax-savvy. A donor-advised fund lets you make a large, deductible contribution now, but decide later which charities receive the grants. It’s essentially a charitable investment account you control for future giving.

Here’s why DAFs make sense:

• You receive an immediate tax deduction in the year you fund the DAF.
• You can donate appreciated securities directly into the fund.
• You can spread your grantmaking to charities over years — ideal if you’re planning thoughtfully or waiting to identify the right organizations.

DAFs work beautifully for “bunching” strategies, liquidity events, or windfall years — say you’ve sold a business, exercised stock options, or want to offset unusually high income. But a reminder: QCDs (Qualified Charitable Distributions) can’t go into DAFs. Those are separate tools (we’ll get to them next).

To stay compliant, make sure your DAF sponsor is reputable, your contributions meet the long-term holding requirement, and you observe the 30% of AGI limit for appreciated assets or 60% for cash.

Qualified Charitable Distributions (QCDs) for IRA Owners 70½+

For retirees, few charitable tools rival the simplicity and tax efficiency of the Qualified Charitable Distribution. If you’re age 70½ or older, you can transfer up to $105,000 (2024 limit) directly from your IRA to qualified charities — and it’s excluded from your taxable income entirely.

Unlike itemized deductions, a QCD doesn’t require you to exceed the standard deduction threshold. It simply reduces your taxable IRA balance while satisfying all or part of your required minimum distribution (RMD).

Mechanics matter here:

• The transfer must be direct from the IRA custodian to the charity.
• QCDs can come from traditional, inherited, or inactive SEP/SIMPLE IRAs (not 401(k)s).
• Funds can’t go to DAFs, private foundations, or supporting organizations.
• Charities should provide a written acknowledgment, and your custodian will issue Form 1099-R — though the QCD won’t be explicitly labeled on the form, so you or your preparer must report it correctly.

The IRS has tightened documentation expectations in 2025, so double-check acknowledgment letters and transaction coding. And as with all year-end moves, make sure your transfer clears before December 31.

Bunching and Multi-Year Planning

Here’s where the strategies tie together. The “charitable floor” coming in 2026 could make routine giving less tax-efficient. So, consider bunching several years of donations into 2025 to claim a larger itemized deduction this year, then reverting to the standard deduction in 2026 and beyond.

A practical version of this:

• Donate appreciated securities to a DAF in 2025 to capture the deduction now.
• Continue to make annual grants from the DAF in future years.
• If you’re 70½+, supplement your giving with annual QCDs for continued tax-free IRA withdrawals.

Think of it like front-loading your generosity — giving yourself (and your causes) a head start before the rules shift.

Choosing the Right Asset to Donate

Not all assets are created equal when it comes to charitable efficiency. The best candidates are:

• Low-basis, long-term appreciated stock or ETFs
• Concentrated positions (especially those you’d like to trim for diversification)
• Assets with near-term tax exposure

If you own complex assets like restricted stock, privately held business interests, or real estate, some DAF sponsors and specialized charities can accept them — but these gifts take longer to process and often require a qualified appraisal. Start early and get professional guidance; documentation requirements for non-cash gifts over $250 are strict, and the appraisal threshold begins at $5,000.

Checklist and Timeline for Year-End Giving

A few key dates can make or break your charitable plans. Here’s a quick roadmap:

• By October/November
  Identify appreciated securities and confirm which charities or DAF sponsors can receive them. If you’re opening a new DAF, get that process started now.
• Early December
  Initiate all transfer requests. Confirm DTC instructions, contact details, and settlement times. Custodians and charities get swamped in December — earlier is better.
• By December 31
  Ensure all gifts (securities or cash) and QCDs are received by the charity or DAF. This is the hard IRS cutoff for 2025 deductibility.

Bringing It All Together

The beauty of charitable giving is that it blends generosity with good planning. Done right, it helps others and strengthens your financial picture. For many investors, 2025 is the last year to give under today’s rules — and that makes thoughtful planning even more valuable.

If you’re thinking about gifting appreciated stock, making a QCD, or setting up a donor-advised fund before year-end, let’s talk. We can help you choose the right strategy for your goals, review the potential tax impact, and make sure everything clears before the holiday rush.

And if you’d like a year-end donor checklist with key deadlines and tax reminders, we’ll send one your way — just reach out through our contact form or schedule a charitable strategy session before December.