Why 2025 Is a Pivotal Year for Charitable Giving
New tax laws taking effect in 2026 will change how charitable gifts are deducted. While those changes may sound discouraging at first, they also create a powerful opportunity: 2025 is the last year to take advantage of today’s more favorable rules.
What’s Changing in 2026—and Why It Matters Now
Starting in 2026, several new rules will reduce the tax efficiency of charitable giving for many donors. These changes reward donors who plan ahead.
- A new AGI floor for itemizers: Only charitable contributions exceeding 0.5% of Adjusted Gross Income (AGI) will be deductible.
- Example: A household earning $200,000 will lose the deduction on the first $1,000 they give.
- A lower deduction cap for high-income donors: The value of itemized deductions will be capped at 35%, down from 37%.
- Donor-Advised Funds (DAFs) and non-itemizers: The new charitable deduction for standard-deduction filers will not apply to gifts made through DAFs starting in 2026.
- Corporate giving: C-corporations will lose deductibility on the first 1% of taxable income, making smaller sponsorship gifts less tax-efficient.
Smart Strategies to Consider in 2025
Bunch Your Giving: Combine two or three years of planned gifts into a single tax year. This allows donors to exceed the new AGI floor and preserve deductions that would otherwise be lost.
Use a Donor-Advised Fund (DAF): By contributing to a DAF in 2025, donors receive an immediate deduction under current rules—then recommend grants to charities over future years. This approach can eliminate the impact of the 0.5% AGI floor for years to come.
Donate Appreciated Stock: Gifting long-term appreciated securities allows donors to avoid capital gains tax while receiving a fair-market-value deduction—one of the most efficient ways to give.
Maximize Qualified Charitable Distributions (QCDs): If you are 70½ or older, you can give directly from your IRA—up to $100,000 per person in 2025 (and $108,000 in 2026). QCDs don’t count as taxable income and remain one of the most powerful charitable tools available.
A Moment to Lean In—Not Pull Back
Tax changes can cause uncertainty, and uncertainty can pause generosity. But with the right guidance, 2025 becomes a moment to lean in—to give more strategically, not less. By acting now, donors can:
- Preserve deductions before new limits apply
- Lock in today’s more favorable rules
- Support Achieva with greater impact
We encourage you to speak with your financial or tax advisor about how these strategies may apply to your situation—and to consider how a thoughtful 2025 gift can make a lasting difference.