Charitable Planning to Wrap Up 2025: Strategies to Maximize Your Impact and Your Tax Benefits

As 2025 comes to a close, many families, retirees, and business owners are taking a fresh look at their charitable goals. This year is particularly important because the One Big Beautiful Bill Act (OBBBA) introduces meaningful tax changes starting in 2026. These changes affect how charitable deductions may be valued in the years ahead, making strategic year-end planning especially valuable.

While charitable giving starts with generosity, thoughtful coordination can help you support the causes you care about while aligning your giving with your broader financial plan.

Below are the key considerations to keep in mind as you approach year-end.

1. Understand Your Giving Capacity: Your 30% & 60% AGI Buckets

The IRS limits how much of your charitable giving you can deduct each year based on what you give.

Gifts of Appreciated Securities — Up to 30% of AGI

Long-term appreciated stock, ETFs, and mutual funds can be an exceptionally tax-efficient way to give:

• You avoid capital gains tax on the appreciation.

• You may deduct the gift up to 30% of your Adjusted Gross Income (AGI).

When this bucket is full, you may still have additional deduction room.

Cash Gifts — Up to 60% of AGI

Cash gifts can fill the remaining deduction space, up to 60% of AGI total.This combined approach allows you to maximize deductions while giving strategically.

2. Why 2025 Matters: OBBBA’s Impact on Charitable Planning for 2026+

Beginning in 2026, OBBBA adds two major constraints for higher-income taxpayers:

1. A 0.5% of AGI Floor for Charitable Deductions

The first 0.5% of AGI given will not be deductible.

2. A 35% Cap on the Tax Benefit of Deductions

Even if you’re in a higher marginal tax bracket, the tax benefit of a charitable deduction is capped at 35%.

Practical takeaway: A charitable dollar donated in 2025 may deliver a materially greater tax benefit than that same dollar donated in 2026.

For many taxpayers, especially high earners, this creates a compelling case to accelerate planned giving into 2025.

3. Donor-Advised Funds (DAFs): A Flexible Year-End Tool

A Donor-Advised Fund (DAF) is one of the most effective tools available for year-end planning.

With a DAF, you can:

• Make a large gift in 2025 (cash or appreciated securities)

• Claim the full deduction this year

• Grant the funds to charities later on your own schedule

• Invest the balance inside the DAF for potential long-term growth

For families anticipating reduced charitable deductibility in 2026+, a DAF offers both immediate tax benefits and long-term control.

4. Planning for High-Income Families: Dropping a Tax Bracket With Charitable Giving

Strategic charitable giving can help reduce taxable income enough to move from a higher tax bracket to a lower one. A common planning goal is reducing taxable income from the 35% bracket down to the 32% bracket for 2025.

This may be achieved through:

• Donations of appreciated securities (up to the 30% AGI bucket)

• Cash gifts (reaching the 60% AGI limit)

• Lump-sum contributions to a DAF

• Coordinating charitable giving with retirement contributions, Roth conversions, or timing of income

For some families, this bracket-reduction strategy creates meaningful tax savings while supporting organizations they value.

5. Qualified Charitable Distributions (QCDs) for Retirees

If you’re 70½ or older, Qualified Charitable Distributions (QCDs) allow you to give directly from your IRA—up to $105,000 per person in 2025.

QCDs offer several benefits:

• They can satisfy all or part of your Required Minimum Distribution (RMD)

• The distribution is excluded from taxable income

• Lower AGI may help reduce Medicare IRMAA surcharges

• Lower AGI may reduce taxation of your Social Security benefits

Although QCDs do not create an itemized deduction, the reduction to taxable income is often even more impactful.

6. Standard vs. Itemized Deduction: Should You Bunch Gifts in 2025?

High standard deductions mean that some families may not itemize each year. In these cases, bunching charitable contributions—consolidating multiple years of giving into one tax year—can help ensure the deduction is utilized.

A DAF is commonly used for this strategy, allowing the donor to itemize in the bunching year while spreading actual grants over several years.

7. Putting It All Together: Charitable Planning Within Your Financial Plan

Charitable planning is most effective when viewed holistically. Your giving strategy should align with:

• Retirement income planning

• Portfolio strategy and capital gains management

• Roth conversion timing

• Social Security and Medicare considerations

• Real estate income, deductions, and capital gains

• Cash-flow and lifestyle goals

For many families, the intersection of these factors opens the door to structured, tax-efficient generosity.

Final Thought: Give With Purpose, Plan With Intention

The 2025 tax year offers a unique window where charitable contributions may deliver greater tax benefits before OBBBA changes take effect. Whether your goal is to reduce taxable income, support causes you care about, or maximize tax efficiency, thoughtful planning can make a significant difference.

If you’d like help reviewing your charitable strategy or coordinating gifts with your broader wealth plan, we are here to help.

Contact Us

---

Rigden Capital Strategies was born out of a simple but powerful idea: financial advice should be personal, transparent, and built around your goals—not generic solutions or product-driven sales. Fueled by decades of experience and a desire to see clients truly succeed, we’ve created a process rooted in value, integrity, and progress.

As a fee-only fiduciary, we offer dynamic, stress-tested wealth plans tailored to your life. Our expertise spans investment management, retirement and tax planning, and estate guidance blending active and passive strategies to help your portfolio through any market. We believe in real relationships, clear strategies, and long-term results.

Your goals, our strategies. Together, let’s make your goals happen.

Disclosure: This content is for informational and educational purposes only and should not be interpreted as financial, legal, or tax advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information provided. Investment decisions should be based on individual circumstances, and we recommend consulting a qualified professional before implementing any financial, legal, or tax strategies. Past performance is not indicative of future results, and all investments carry risks, including potential loss of principal. No investment strategy can guarantee success or protect against loss in all market conditions. Investors should carefully consider their risk tolerance, investment objectives, and financial circumstances before making investment decisions.