For years, the rules around charitable giving have held steady. But starting in 2025, upcoming tax code changes could impact not just how much you give—but also when and how you give.
If you’re a high earner, chances are you’ve built a career that does more than support your family—it creates jobs, contributes to your community, and reflects your values. For many, that same sense of purpose extends beyond work into a desire to support causes that matter deeply.
A Donor-Advised Fund (DAF) can be a thoughtful way to give. It offers upfront tax benefits while giving you the flexibility to decide how and when your donations are distributed. With changes on the horizon, now may be a good time to revisit your giving strategy. The steps you take today can shape both the impact of your generosity and your long-term financial plan. [1]
What is a Donor Advised Fund and Why Does This Matter Now?
If you’re not familiar with Donor-Advised Funds (DAFs), now’s a good time to get acquainted, especially with new tax rules on the horizon. Starting in 2026, the deductibility of charitable contributions will decrease for those in the top tax bracket. If giving back is already part of your values, it may make sense to increase your donations in 2025 to maximize the current tax benefits.
A DAF is a charitable investment account set up to support the organizations you care about. You can contribute cash, stocks, mutual funds, and even complex assets like privately held business interests or cryptocurrency. In return, you receive an immediate tax deduction. Plus, the assets in your DAF can grow tax-free until you’re ready to make grants.
One of the biggest advantages of a DAF is the flexibility it offers. The sponsoring organization handles the administrative legwork, so you can focus on aligning your giving with your values while retaining control over how and when your dollars are distributed.
While there are some potential pitfalls to consider, a DAF allows you to consolidate contributions into a single tax year—capturing a larger deduction—while spacing out the actual donations over time. That’s one reason 2025 could be an especially strategic year to revisit your giving plan. [2]
What the 2026 DAF Tax Law Changes Mean for You
As you may know, the One Big Beautiful Bill Act (OBBBA) was signed into law this year. It preserves many features of the 2017 Tax Cuts and Jobs Act (TCJA) while introducing key updates that will significantly impact charitable giving starting in 2026. For donors, especially high earners, these changes bring both opportunities and challenges, making timing an important part of any giving strategy. [3]
One of the most notable updates is a cap on charitable deductions for those in the highest tax bracket. Beginning in 2026, itemized deductions will be limited to 35%, down from 37%. That means top earners will no longer receive the full value of their current marginal rate. For example, a $1,000 donation in 2025 would yield a $370 deduction; in 2026, that same gift would result in only $350.
In addition, a new “floor” requires charitable contributions to exceed 0.5% of adjusted gross income (AGI) before they can be deducted. So, if your AGI is $600,000, only donations above $3,000 would be deductible.
Taken together, these changes make 2025 a particularly strategic year to consider larger or accelerated charitable contributions—especially while higher deductions remain available.
And that’s just the beginning. The OBBBA also:
- Reintroduces above-the-line deductions for non-itemizers
- Expands the SALT deduction
- Makes permanent the ability to deduct up to 60% of AGI for cash gifts to public charities
- Raises the estate and gift tax exemption to $15 million in 2026, creating additional opportunities for lifetime charitable planning
The bottom line? Giving strategies that worked in past years may not deliver the same results going forward. With reduced deductibility on the horizon, 2025 could be a smart time to revisit your approach, possibly by consolidating gifts or using a Donor-Advised Fund (DAF) to your advantage.
Will You Contribute to a DAF This Year?
As you think about your charitable giving, 2025 offers a unique window of opportunity.
With new tax rules set to reduce the deductibility of charitable contributions in 2026, this year may be the right time to act. For some, that could mean accelerating donations, consolidating several years of gifts into one (a strategy often called “bunching”), or using a Donor-Advised Fund (DAF) to secure current deduction rates while maintaining flexibility over when and how to give.
Another powerful option is donating highly appreciated stock. By contributing shares directly, you avoid paying capital gains tax on the sale and still receive the full value of the contribution at the time it’s made.
At Envision Wealth Planners, we work closely with clients to integrate philanthropy into a broader financial plan. Our goal is to help you maximize both tax efficiency and the long-term impact of your giving, while steering clear of common missteps. It’s not just about numbers and deductions. It’s about aligning your resources with your values in a way that brings you greater freedom and supports the causes you care about.
If charitable giving is part of your 2025 plans, now is the time to start the conversation. We can help you approach it with clarity and purpose, making the most of today’s tax landscape while building a lasting legacy for the future.
Sources:
- https://www.irs.gov/charities-non-profits/charitable-organizations/donor-advised-funds
- https://www.investopedia.com/terms/d/donoradvisedfund.asp
- https://bipartisanpolicy.org/explainer/the-one-big-beautiful-bill-acts-changes-to-charitable-deductions/
Sean Gerlin, CFP®, CPWA®, ChFC®, CLU®, is the Founder and Principal of Envision Wealth Planners, a fee-only financial advisory firm based in the greater Orlando area. Sean specializes in helping high-income families, business owners, and commercial real estate executives align their wealth with their values through a comprehensive Financial Life Planning approach. Learn more about them at envisionplanners.com.
This material has been prepared in collaboration with Crystal Marketing Solutions, LLC, and has been edited with the assistance of artificial intelligence tools. The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.