Give with a plan: How to make the most of your charitable giving

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The end of the year is a good time to evaluate how charitable giving can enhance your overall financial plan. Charitable giving can strengthen your personal values, help protect the causes you love, and even provide potential tax benefits.  

Year-end planning has become even more essential this year due to the passage of the One Big Beautiful Bill Act (OBBBA). This new legislation expanded opportunities for everyday donors and introduced new limitations for high-income taxpayers. With 2026 approaching, now is the time to plan your charitable contributions to make a meaningful impact and enjoy potential tax reduction. 

New Tax Law Changes 

The One Big Beautiful Bill Act became law on July 4, 2025. While the bill largely preserved the current tax framework, it also changed certain charitable giving provisions. Starting in 2026, taxpayers who itemize deductions will only be able to deduct charitable contributions that exceed 0.5% of their adjusted gross income. Also starting next year, taxpayers in the top federal marginal bracket of 37% will see charitable deductions capped at only 35%. These changes could provide an opportunity to accelerate your charitable giving in 2025 before the new limitations take effect next year. 

For taxpayers who generally claim the standard deduction, starting in 2026, the new law allows up to $1,000 of cash donations per taxpayer ($2,000 for joint filers). This deduction is in addition to the standard deduction, providing an added benefit for more taxpayers. 

Assess your personal circumstances to decide when and how best to contribute to charity. 

Donor-Advised Funds 

Donor-advised funds have grown in popularity as a cost-effective, flexible, and tax-efficient way to manage charitable giving. These funds allow you to contribute now, receive an immediate tax deduction, and distribute grants to charities over time. 

You can contribute to a donor-advised fund in the form of cash, appreciated securities, and complex assets. While most taxpayers default to cash contributions, contributing highly appreciated assets often produces a larger tax benefit as you can receive a tax deduction up to the fair market value of the asset and avoid paying capital gains taxes on any appreciation. 

Donor-advised funds also pair well with a “bunching” strategy that allows you to make multiple years’ worth of charitable giving in a single tax year. This strategy can help you exceed the standard deduction threshold, making it possible to itemize deductions and maximize the value of your charitable contributions. 

Qualified Charitable Distributions (QCDs) 

For retirees, qualified charitable distributions from traditional IRAs offer a unique advantage. Individuals age 70½ or older can transfer funds directly from their traditional IRA to a qualified charity of their choice. 

These distributions can fulfill all or part of your required minimum distribution while excluding the charitable portion from your federal taxable income. QCDs offer tax advantages even without itemizing deductions and can help control adjusted gross income, reducing the risk of Medicare surcharges. For 2025, the maximum annual amount you can donate through a QCD is $108,000. 

Putting Your Giving Strategy into Action 

Regardless of how you donate, it’s important to maintain proper documentation. Ensuring proper valuations, obtaining written acknowledgements, and retaining records are essential for substantiating your deductions for tax purposes. 

With the right strategies, you can support meaningful causes while optimizing your financial plan. Whether you are donating cash, appreciated assets, or using advanced charitable vehicles, a proactive approach can help elevate both your tax efficiency and philanthropic impact. 

To help ensure your strategy aligns with your overall financial goals, consider consulting with your tax advisor or financial planner before finalizing year-end contributions. With thoughtful planning, you can make your charitable giving work harder for both you and the communities you care about. 

Joseph Marmorato is a senior tax strategy advisor in Savant Wealth Management’s Lancaster office. He’s a CERTIFIED FINANCIAL PLANNER® professional and Certified Public Accountant who specializes in comprehensive financial planning, including wealth transfer, philanthropy, proactive tax strategies, retirement income optimization, and education funding. 

Savant Wealth Management (“Savant”) is an SEC registered investment adviser headquartered in Rockford, Illinois. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. This is intended for informational purposes only.