Making the Most of Charitable Giving in 2025, Starting This Giving Tuesday

Giving Tuesday carries extra weight this year. If charitable giving is part of your vision – personally or through your business – the next few weeks are a rare chance to support the causes you care about and lock in valuable tax benefits at the same time.

With the One Big Beautiful Bill Act (OBBB) set to update charitable deduction rules in 2026, 2025 is a pivotal year. For business owners and regular donors, this tax year is the window to use the current, more favorable framework before the new limits and floors take effect.

The OBBB introduces new rules that reshape how charitable deductions work for both corporations and individuals. Starting in 2026:

• Corporations will face a 1% floor on charitable deductions
• Individual itemizers will have a 0.5% AGI floor for charitable deductions

These floors mean you can only deduct contributions that exceed those thresholds.

For individuals in the 37% tax bracket, each dollar donated under the new framework will generate 35 cents in tax savings, compared to 37 cents today. That difference creates a clear incentive to be intentional about your giving before the new rules begin.

However, there is positive news as well. Non-itemizers will gain a permanent $1,000 charitable deduction ($2,000 for married couples filing jointly). That change brings millions of taxpayers into a world where charitable giving has a direct tax benefit, not just a personal one.

The guidance for this year is simple: don’t wait.

If charitable giving is already part of your plan, 2025 is the year to consider pulling future gifts forward. Instead of spreading contributions evenly across 2025, 2026, and 2027, you may benefit from concentrating more of that giving into 2025, when:

• There is no AGI or corporate “floor” to clear under the new framework
• Deductions are taken under today’s rules, which are more favorable for many taxpayers

For corporations, front-loading charitable contributions into 2025 can be especially powerful. The OBBB’s five-year carry-forward provision means that excess charitable deductions from 2025 can be carried forward and used to offset income through 2030 under the current rules. That gives you a longer runway to use deductions you lock in today.

Knowing exactly how the current law works makes planning far easier than trying to adapt later to new thresholds and limitations.

One of the most flexible tools for year-end planning in 2025 is a donor-advised fund (DAF).

With a donor-advised fund, you can:

• Make a large, potentially multi-year charitable contribution in 2025
• Claim the full deduction in 2025 (subject to existing limits)
• Recommend grants to your favorite charities over time, at your own pace

If you know you want to continue your charitable giving in 2026 and beyond, but also want to secure today’s more favorable tax treatment, a DAF can bridge that gap. You separate when you claim the deduction from when the money leaves the fund for individual organizations, which gives you more time to decide how and where you want to give.

The OBBB also opens the door to more tax-aware generosity for people who don’t itemize.

The new permanent $1,000 deduction for non-itemizers ($2,000 for married couples filing jointly) makes charitable giving more attractive to taxpayers who typically take the standard deduction and previously received no additional tax benefit for their donations.

While it’s important to note that this new non-itemizer deduction does not currently apply to donor-advised funds, it still marks a meaningful expansion of tax benefits for everyday givers who donate directly to qualified charities.

If charitable giving is part of your financial life, here’s how to use the rest of this year well:

1. Review your giving goals and clarify what you plan to give in 2025, 2026, and 2027 – both personally and through your business – and explore whether shifting some of that future giving into 2025 makes sense.
2. Talk with your CPA and ask how bunching multiple years of planned giving into 2025 could affect your tax position under the OBBB rules coming in 2026.
3. Evaluate donor-advised funds and consider whether setting up or adding to a DAF in 2025 fits your philanthropic style and long-term plans.
4. If you’re a non-itemizer, run the numbers and look at how the new non-itemizer deduction interacts with your standard deduction and planned giving so you can understand how the OBBB affects you going forward.

The current rules give you an unusually strong opportunity to align your charitable plans with your broader tax strategy before December 31, 2025. So if giving is part of your vision, whether as an individual, founder, or a corporation, this year is the moment to be intentional and proactive about how you give and how you plan.