A Smarter Way to Approach Year-End Giving

As 2025 winds down, charitable giving is top of mind for many families, not just as a tradition, but as a strategic financial move. Below are some insights on why December matters, how tax laws are changing, and what to consider with your charitable gifts.

Key Facts to Know

• December is prime giving season: Nearly half of annual online donations occur in December, with 20 percent made on December 31.¹
  
  
• Tax benefits matter: Donations before December 31 may help manage taxable income; starting in 2026, new rules might adjust deductions for high earners and corporations.²
  
  
• Choose charities wisely: Use tools like Charity Navigator, GuideStar, or BBB Wise Giving Alliance to evaluate transparency and impact.
  
  
• Smart giving strategies: Consider IRAs, donor-advised funds, appreciated securities, and bundling contributions.
  
  
• Professional guidance helps: Tax laws are complex; coordinating with financial, tax, and legal professionals can help you make the most of your strategy.
  
  

Why Giving Spikes in December

Nonprofits often receive 17–31 percent of their annual online revenue in December, with 47 percent of that in the last week and 20 percent on December 31 alone.¹ Emotional and strategic factors drive this trend:

• The holiday season inspires generosity, gratitude, and a sense of community.
  
  
• Many Americans reflect on the year and want to “finish strong” by giving back.
  
  
• From a financial perspective, charitable contributions made by year-end also can have tax benefits.
  
  

Americans gave over $590 billion in 2024, a 6.3 percent increase from the prior year and the largest jump since 2021.³ Giving Tuesday alone raised $3.6 billion in 2024, up 16 percent from 2023. 

Most of these dollars came from individuals (66 percent), followed by foundations (19 percent), bequests (8 percent), and corporations (7 percent).³ Looking ahead, $18 trillion of the projected $124 trillion wealth transfer through 2048 is expected to go to charity.⁴

What’s Changing with Tax Law

The “One Big Beautiful Bill Act” might affect charitable deductions starting in 2026:

• Non-itemizers can deduct up to $1,000 (single) or $2,000 (married filing jointly).
  
  
• Itemizers may only deduct contributions above 0.5 percent of adjusted gross income.
  
  
• For those in the top tax brackets, deductions will be capped at 35 percent of the donation amount (For example, in certain instances, a $1,000 gift will yield a $350 deduction, not $370).
  
  
• Corporations will only be able to deduct contributions above 1 percent of income.²
  
  

For high earners and corporations, you might need to address how your current strategy works or conflicts with the new rules.

Tax-Advantaged Giving Strategies to Consider

We’ve helped many clients incorporate charitable giving into their broader financial and estate strategies. Here are a few approaches worth discussing:

• Qualified Charitable Distributions (QCDs): If you’re 70½ or older, you can donate up to $108,000 from your IRA in 2025 ($216,000 per couple). This counts toward required minimum distributions and may help manage your taxable income.⁵
  
  
• Donating Appreciated Securities: Contributing stock directly might help you manage capital gains taxes.
  
  
• Donor-Advised Funds (DAFs): Contribute now for an immediate deduction, then decide over time which charities to support.⁶
  
  
• Charitable Remainder Trusts (CRTs): Donate assets, receive income for life or a set term, and leave the remainder to charity.⁷
  
  
• Charitable Lead Trusts (CLTs): Provide income to charities for a period, then pass the remaining assets to heirs, potentially reducing estate taxes.⁸
  
  
• Bundling Contributions: Grouping several years’ worth of donations into one year may help you itemize deductions and maximize tax efficiency.⁹
  
  

Factors to Consider

Once you reach age 73, you must begin taking the required minimum distributions from a traditional IRA in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10 percent federal income tax penalty.

Some donor-advised funds are considered mutual funds and are sold only by prospectus. The prospectus will provide information on charges, risks, expenses, and investment objectives and should be reviewed carefully before investing. Investment companies can provide a prospectus, or you may prefer to ask your financial professional. Please read it carefully before you invest or send money.

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.

The Bottom Line

Charitable giving is both emotional and strategic. By aligning your philanthropy with thoughtful financial preparation, you can support causes you care about while supporting your financial and estate strategy.

If you’d like to review your year-end giving approach, we’d be glad to help. Let’s schedule a time to talk before the end of the year.

^{1. DonorBox.org, August 21, 2025}

^{2. FidelityCharitable.org, July 2025}

^{3. BenefactorGroup.com, September 2025}

^{4. Cerulli.com, December 5, 2024}

^{5. Schwab.com, December 13, 2024}

^{6. FidelityCharitable.org, September 2025}

^{7. IRS.gov, September 2025}

^{8. AccountingInsights.org, February 8, 2025}

^{9. SturgillTurner.com, September 2025}