Three Tax Efficient Ways To Give This Year and Beyond
Giving to a cause or charity, much like planning for retirement, is deeply personal. But while retirement planning usually happens out in the open, generosity often happens quietly, sometimes in complete privacy.
As a financial planner, nothing makes me happier than seeing clients light up when they talk about supporting causes close to their hearts.
That’s what creating alignment between your money and your values is all about.
Still, I know giving is often a private decision. Because of that, I often only learn about a client’s gift after it’s been made. And when I ask how they gave, the most common answer is: “I wrote a check” or “I gave in cash.”
On one hand, giving is giving—and that’s what truly matters in making a difference. On the other, the planner in me can’t help but think: Writing a check is rarely the most tax-efficient way to give.
And with the recent passing of the One Big Beautiful Tax Bill (OBBB), 2025 and beyond are shaping up to be one of the best stretch of years in recent memory to give strategically. So, I thought it would be worth sharing some of the most common—but still underutilized—giving strategies I see in my work.
More Bang for Your Buck
Under the new One Big Beautiful Tax Bill (OBBB), there’s a brand-new perk for givers, and this still applies— even if you don’t itemize your deductions.
That’s right: even if you take the standard deduction, beginning in 2026, you can still deduct up to $1,000 in cash donations if you’re Single or Head of Household, or $2,000 if you’re Married Filing Jointly.
Here’s the fine print (which in this case is actually good news):
Charitable Deduction for Non-Itemizing Tax Payers
Credited as an “Above-the-line” deduction — available even if you take the standard deduction
Charitable contributions not subject to the 0.5% AGI floor
Must be Cash contributions only
Can go to public or private charities (but not 509(a)(3) supporting organizations
Cannot be used to establish or maintain a Donor Advised Fund (DAG)
Here’s the fine print (which in this case is actually good news):
Charitable Deduction for Itemizing Tax Payers
Starting in 2026, those who itemize their deductions will — for the first time — be allowed to deduct their cash contributions only to the extent they exceed 0.5% of their adjusted gross income.
For example, say your adjusted gross income is $100,000. You will be allowed to deduct the amount of your total cash gifts minus $500 (0.5% of $100,000. So if you make $2,000 in cash contributions, you only will be allowed to deduct $1,500. Source: CNN Business
Three Ways to Give More Effectively in 2025
1. Give Appreciated Investments Instead of Cash
If you own investments in a taxable account that have been held for more than a year with significant unrealized gains, you can donate them directly to charity and deduct their fair market value.
The charity can then sell the assets without paying the capital gains tax.
This strategy allows you to avoid capital gains taxes (plus the Medicare surtax, if applicable) and still receive a full deduction for the donation, while the charity enjoys the full benefit of your gift. A true win/win.
BONUS: If your favorite nonprofit doesn’t accept securities directly, you could use a donor-advised fund (DAF) as a middle step. In this case, you could transfer the appreciated shares into the DAF, get the tax deduction in that year, and then provide “grants” to your chosen charities immediately or over time. Any funds not immediately distributed can grow tax-free.
2. “Bunch” Your Giving for a Bigger Tax Impact
With the expanded standard deduction, many people no longer itemize deductions each year, meaning some charitable gifts don’t create any tax benefit at all.
Therefore, if you can, you might want to consider “bunching” multiple years’ worth of giving into a single year.
In a bunching year, you give more than usual—again, using a DAF or similar setup—so that your itemized deductions exceed the standard deduction with the intent to spread the actual grants to charities over several years.
So instead of giving in December of 2025 and early 2026, you can bunch your donations together into one calendar year for a greater tax impact.
Bunching can also be especially valuable in high-income years, such as after a business sale, a large bonus, or other high-income events, when a tax deduction is worth more.
In either case, you could think of a DAF as a charitable “holding tank” for future giving.
3. Give Directly from Your IRA
If you’re over 70½, you can give directly from your IRA to a qualified charity using what’s called a Qualified Charitable Distribution (QCD). This is one of the few ways to distribute money from an IRA without it counting as taxable income.
For investors 73 or older who are taking Required Minimum Distributions, QCDs can satisfy some (or potentially, all) of that requirement. By keeping this income off your tax return, it could help reduce your Social Security taxability or decrease your Medicare premiums.
In other words, using your charitable endeavors to manage your taxable income can be valuable in ways that aren’t immediately obvious.
The Bottom Line
As surprising as it may sound, none of these strategies require complex planning. The biggest step is simply having the conversation before you write the check, so we can align the right strategy with your charitable goals—and make sure there’s enough time left in the year to put it in motion.
That’s why we bring this up in the summer, not in a last-minute scramble in late December. Once the process is set up, it’s usually easy to repeat year after year.
Here are just a few ways these strategies can be used:
Support a cause you care about at a higher dollar amount than you thought possible.
Reduce or eliminate a concentrated stock position without triggering a big tax bill.
Reduce your IRA balance in retirement in a way that benefits charity instead of the IRS, while potentially saving on taxes and Medicare premiums at the same time.
As I said earlier, I’m sharing these ideas to encourage conversation around giving strategically. I know that generosity isn’t necessarily about saving money on taxes, but my goal is to help you make the biggest impact possible, both for the causes you care about and your bottom line.
So, if one or more of these ideas sound appealing, let’s talk.
As always, stay the course.
Disclaimer: The views and opinions expressed are made as of the date of publication and are subject to change over time. The content of this website is for informational or educational purposes only. Website content is not intended as individualized investment advice, or as tax, accounting, or legal advice. It is not intended to be a recommendation or endorsement to buy or sell the specific investment. This information should not be relied upon as the sole factor in an investment-making decision. Website users are encouraged to consult with professional financial, accounting, tax, or legal advisers to address their specific needs and circumstances.