top of page
Search

Make Your Year-End Giving Count: Smart Strategies for 2025

  • Writer: Eiger
    Eiger
  • 1 day ago
  • 8 min read

Updated: 17 hours ago

As the holiday season approaches and the year draws to a close, many Americans feel inspired to give back to causes they care about. But charitable giving is about more than just generosity—it's also an opportunity to make strategic decisions that maximize both your impact and your tax benefits. With significant tax law changes on the horizon in 2026, understanding your options now could help you make the most of your charitable contributions. Whether you're a seasoned philanthropist or just beginning your giving journey, this guide will help you navigate year-end donation strategies that align with your values and your financial goals.


Hands holding a red heart on a wooden table with cash and coins nearby. The word "GIVING" is spelled out in white letters.

Key Takeaways

  • About one-third of all charitable contributions occur in December.

  • Donating before December 31 may offer tax advantages because new rules starting in 2026 (via the OBBB Act) may affect deductions for high earners and corporations.

  • Consider tools like IRAs, donor-advised funds, appreciated securities, and bundling donations.

  • Because of complex rules and evolving tax laws, working with financial, tax, and legal professionals may help you make the most of your charitable giving strategy.


About one-third of all charitable contributions are made in December, driven by a mix of holiday generosity and year-end tax preparation. In addition, nonprofits often receive 17–31 percent of their annual online revenue this month—nearly half of it in the final week and 20 percent on December 31.


The holiday season naturally encourages reflection, gratitude, and a desire to give back. Nonprofits amplify this momentum through year-end campaigns, knowing donors are especially receptive during this time.


Strategically, many Americans also give before December 31 to take advantage of potential tax benefits, particularly higher-income households and businesses.


Keep in mind that this article is for informational purposes only and is not a replacement for real-life advice. Consult your tax, legal, and accounting professionals before modifying your charitable giving strategy for tax reasons.


America Is a Generous Nation


$592.5B contributions in 2024 with a 6.3% increase from 2023, largest rise since 2021. Dark blue background, gold ribbons.

Regardless of the motivation, Americans are generous. For 2024, total charitable contributions were over $590 billion. That’s a 6.3 percent increase from the prior year and the largest increase since the pandemic year of 2021.


"Giving Tuesday," which takes place on the Tuesday after Thanksgiving, has also evolved into a global movement that encourages year-end donations, particularly through social media and online platforms. Nonprofits raised a record $3.6 billion on Giving Tuesday in 2024, a 16 percent increase from 2023.


This year, Giving Tuesday (not to be confused with the spending holidays of Black Friday or Cyber Monday) is December 2nd.  


Who Is Contributing?


Chart shows donation sources: Individuals 66%, Foundations 19%, Corporations 8%, Bequests 7%. Text: Who Gave? Source: The Benefactor Group.

Individuals donate most of the nation’s charitable contributions—by a lot. In total, 66 percent of last year’s giving came from individuals, an 8.2 percent increase from the prior year. The closest runner-up was foundations at 19 percent, followed by bequests at 8 percent and corporations at 7 percent.


The bequest slice of the charitable contribution pie may expand in the coming years as the 'Great Wealth Transfer' from older generations continues. Cerulli Associates projects that wealth transferred through 2048 will total $124 trillion—$105 trillion is expected to flow to heirs, while $18 trillion will go to charity.


Where Are Contributions Going? 


Charity fund distribution chart: Religion 23%, Human Services 14%, Education 14%, Public-Society Benefit 11%, and others. Source: Benefactor Group.

In 2024, over half of all charitable dollars went to religious institutions (23 percent), Human Services (14 percent), and Education (14 percent). The rest was spread among Foundations (11 percent), Public-Society Benefit (11 percent), Health (10 percent), International Affairs (6 percent), Arts/Culture/Humanities (4 percent), Environment/Animals (3 percent), and the rest went to other small categories. The largest year-over-year percentage increases in donations went to Public-Society Benefits, International Affairs, and Education.


How Do You Choose a Charity to Support?


With so many charities seeking your support, choosing which ones to donate to can be difficult. By researching and preparing, you can find a charity that aligns with your values and uses your donation wisely.


  • Research the Charity: Use publicly available sources to understand what a charity does and who it serves. One factor to consider is the group’s transparency and accountability in financial reporting and program effectiveness. You can also get information on websites such as Charity Navigator, GuideStar, or the Better Business Bureau’s Wise Giving Alliance.


  • Understand the Mission and Impact: Another factor to consider is whether the organization’s values and goals align with yours. Look for a clear and measurable impact on the community or cause they serve. Consider the scope of their programs and services.


  • Consider Your Interests and Passions: Your interests and passions can help you find a cause that resonates with you and inspires you to make a difference.


  • Getting Involved: Many charities offer volunteer opportunities or ways you can participate in their events and campaigns. These opportunities can give you an even greater understanding of the charity’s impact while helping you build a deeper connection to the cause.


How Does the One Big Beautiful Bill Act Impact Charitable Tax Deductions?


In general, the new tax provisions in the OBBB may enhance the tax benefits of charitable donations. However, the Act does introduce limits for high earners. Here are some key changes in tax treatment for charitable donations.


Starting in 2026, the law allows a new charitable gift deduction for taxpayers who do not itemize, letting them deduct up to $1,000 for single filers or $2,000 for married couples filing jointly in addition to taking the standard deduction. Those who itemize can only claim a tax deduction if their qualified charitable contributions exceed 0.5 percent of their adjusted gross income.


For taxpayers who itemize and are in the highest (37%) tax bracket, the tax benefit of charitable deductions will be capped at 35%. This means that for every dollar donated, the tax savings will be 35 cents instead of 37 cents.


Corporations will face new rules, including a 1 percent floor for charitable contributions. In other words, the first 1% of income given to charity no longer gets a deduction.The wanted to prevent excessive tax breaks while still encouraging corporations to give to charity.


You may want to consider these new provisions when thinking about your charitable contribution strategy. If you are a high earner or have a business, you may need to address how your current strategy works or conflicts with the new rules.


What Are Some Tax-Advantaged Charitable Giving Strategies?


As financial professionals, we have worked with many clients over the years to help them create a charitable giving strategy. We often coordinate with our clients' tax professionals and estate attorneys to help align the overall approach.


Here are some ideas to consider when building a strategy.


  • Consider Using Your Traditional IRA to Make Qualified Charitable Distributions. If you are at least 70½ years old, you can donate up to $108,000 in 2025 from your IRA as a Qualified Charitable Distribution. Each spouse can contribute that amount, equaling $216,000 if you are married. The distribution may satisfy your annual required minimum distribution (RMD). Since it is not reported as income, the RMD won’t be reported on your personal tax return. The Tax Cuts and Jobs Act (2017) raised the standard deduction beginning in 2018, which means many taxpayers no longer itemize. As a result, QCDs have become a valuable way for retirees to make charitable gifts whle still receiving a tax benefit.


  • Donating Appreciated Securities. If you’re planning to give to charity using investments that have gone up in value, consider donating the securities themselves rather than selling them first. Doing so may help you avoid capital gains tax while still receiving a charitable deduction for the full fair market value.



  • Donating Depreciated Securities. On the other hand, if you have depreciated securities, you might want to explore the tax consequences of recognizing those losses before making the gift. That approach may allow you to retain the losses, which could be used to offset capital gains in the future.



  • Consult with Your Financial Professional before modifying your investment strategy for tax reasons. Your financial professional may want to speak with your tax, legal, and accounting professionals in advance of moving ahead with any strategy that generates losses in an account.



  • Donor-Advised Funds: A donor-advised fund (DAF) acts like a charitable investment account for the purpose of supporting the charitable organizations you care about. You can contribute cash, securities, or other assets to a DAF and are generally eligible to take an immediate tax deduction. You can recommend grants to the eligible IRS-qualified public charity of your choosing through your DAF.


  • Charitable Remainder Trusts: Charitable remainder trusts are irrevocable trusts that let you donate assets to charity and draw annual income for life or a specific period. You can transfer property, cash, or other assets into an irrevocable trust. The trust pays income to at least one living beneficiary and continues for a specific term or the life of one or more beneficiaries. At the end of the payment term, the remainder of the trust passes to the charitable organization(s).


You can also use up to $54,000 of a Qualified Charitable Distribution from your IRA to make a one-time donation to a charitable remainder trust.


  • Charitable Lead Trusts (CLTs): A CLT is used for both philanthropic and financial purposes. Through this type of trust, you can provide income to one or more charitable organizations for a specified term, after which the remaining assets are transferred to others, such as family members. This structure may allow you to achieve charitable goals while potentially reducing estate and gift taxes. 


Income to the charity can be structured as either fixed or variable, depending on the type of CLT. Fixed annuity payments can provide predictable income to the charity, while unitrust payments, which fluctuate based on the trust’s asset value, can potentially offer growth in the charitable contributions.


  • Using a trust to help your charitable initiatives involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the relevant rules and regulations.


  • Bundling Charitable Deductions. To itemize deductions with the higher standard deduction threshold coming with the OBBB, you might want to consider “bundling” and make your charitable contributions every other year. This strategy could help you accumulate a larger pool of deductions that exceeds your standard deduction amount. For example, in Year 1, you could take the standard deduction with little or no charitable giving, holding off the amount you would have given until Year 2. Then in Year 2, you would donate the equivalent of two years’ worth of charitable contributions and possibly itemize your deductions.


Bundling, for example, works with Donar Advised Funds.  You take an immediate deduction for the entire amount donated to a DAF and then instruct the fund to pay your selected charities over multiple years.


 Your Impact Is About Effectiveness and Timing


Thoughtful philanthropy can create a lasting impact while enhancing your overall financial strategy. We can help you explore the possibilities, from structuring gifts effectively to weighing different approaches and ensuring your philanthropy aligns with your broader financial strategy. If you’re interested, feel free to contact us to discuss how to turn your charitable vision into action for 2025 and beyond.


Sources


The information contained on this site may not reflect current developments; does not constitute investment, tax, or legal advice; and should not be relied upon for such purposes. There is no guarantee that any forecasts made will come to pass. We make no representation about the accuracy of the information or its appropriateness for any given situation. This information is not an offering. Past performance does not guarantee future results.

 
 
 
bottom of page