Why 2025 May Be the Best Year for Charitable Giving

The rules around charitable giving are changing, and for many donors, 2025 presents a rare opportunity. If you have been thinking about making a significant charitable contribution, whether to support a cause you love, set up a donor-advised fund, or simply take advantage of tax savings then acting before year-end could be especially rewarding.

What’s Changing

Beginning in 2026, new tax law changes will limit the amount of charitable deductions individuals can claim each year. While charitable giving will always remain valuable, the tax benefits will become more restrictive.

But here’s the good news: gifts made in 2025 still fall under the current, more generous rules. And even better, if your contribution this year exceeds the allowable deduction limit, the excess deduction can be carried forward for up to five future tax years and those carryovers will not be subject to the new rules.

In other words, by making a larger gift now, you can lock in tax savings not only for this year but for future years as well.

Why It Matters

For individuals with higher income in 2025, or those anticipating future tax exposure, this creates a unique planning opportunity:

  • Accelerate giving: Making larger gifts this year could help offset taxable income while maximizing charitable impact.

  • Protect future deductions: Even if you give more than the limit, you’ll still benefit from today’s more favorable rules in the years ahead.

  • Use smart strategies: Options like donor-advised funds, charitable trusts, or donating appreciated securities can further amplify the tax efficiency of your giving.

Putting It Into Perspective

Think of it this way: you can give $100,000 in 2025, deduct the allowable portion this year, and still carry forward the unused deduction for up to five years, all under current rules. If you wait until 2026, that same $100,000 gift may face tighter restrictions and offer less tax benefit.

The Bottom Line

Charitable giving is always about supporting the causes that matter most to you. But when the tax code gives you a chance to do good while also keeping more in your pocket, it is worth paying attention.

2025 is shaping up to be one of those rare moments. If charitable giving is part of your financial plan, now is the time to revisit your strategy and make the most of this unique window.

Rebecca Stevenson