Charitable Giving Strategies to Consider Before Year-End

Charitable Giving Strategies to Consider Before Year-End

By Rachael Smith, MBA, ChFC®

December 24, 2025

Before the year is out, I wanted to share a brief note on charitable giving, specifically gifts to qualified 501 (c )(3) charities, and a few planning considerations worth discussing with your tax professional or financial planner.

Charitable Bundling Strategies

When the standard deduction was significantly increased under the Tax Cuts and Jobs Act of 2017, many households that previously itemized deductions found that they no longer exceeded the standard deduction each year. As a result, some donors began using charitable bundling, also called bunching, strategies.

A bundling strategy involves making two years’ worth of charitable contributions in a single year, itemizing deductions that year, and then taking the standard deduction the following year. Depending on your overall tax picture, this approach can potentially save hundreds or even thousands of dollars over a two year period.

Cash or Appreciated Securities

Another important consideration is how you give. Donating appreciated securities, such as stocks or mutual funds held for more than one year, can offer two potential tax benefits.

You may avoid paying capital gains tax on the appreciation.
You may still receive an itemized charitable deduction for the full fair market value of the donated asset.

This can be a particularly effective strategy for those with highly appreciated investments held in taxable brokerage accounts.

Using a Donor Advised Fund

A donor advised fund, or DAF, can add flexibility and ease when implementing these strategies. If your DAF is held at the same financial institution as your brokerage account, appreciated securities can often be donated directly through the platform.

While your contribution to the DAF is tax deductible in the year it is made, you can decide later when to distribute grants to your chosen charities. This can be especially helpful if you are bundling donations and want your favorite organizations to receive support over multiple years rather than all at once. In addition, assets inside a DAF can typically be invested, allowing the charitable dollars to potentially grow before grants are made.

Looking Ahead

Charitable giving remains an important planning consideration as we approach upcoming tax law changes. This makes proactive conversations with your financial planning and tax professionals especially valuable.

With a bit of planning, charitable giving can both support the causes you care about and help each gift go a little further.

Wishing you a Merry Christmas and a Happy New Year.

Disclaimer: This content is for educational purposes only and does not constitute personalized investment, tax, legal, or other professional advice.