The end of the year is traditionally a time when many individuals reflect on their values and increase their charitable giving to support causes that are important to them. At the same time, upcoming federal tax law changes make 2025 an especially important year to review your strategy and ensure your generosity is as tax efficient as possible.
Charitable Deduction Changes in 2026
Starting in 2026, itemized charitable deductions will face a change. A 0.5% adjusted gross income (AGI) floor will apply to charitable contributions, reducing the allowable charitable deduction by 0.5% of AGI.
These changes mean that for some individuals, charitable gifts made in 2025 can deliver greater tax savings than those made in future years. Accelerating contributions to public charities, including a donor-advised fund, or a private foundation, can help donors lock in today’s more favorable rules.
Learn More: Fiduciary’s Donor Advised Fund Program
Deduction Limits
When planning charitable gifts, keep in mind the current AGI-based limits:
- Appreciated Securities: Deductions for gifts of appreciated securities are limited to 20% of AGI for private foundations or 30% of AGI to public charities, including donor-advised funds.
- Cash Gifts: Cash contributions to public charities can be deducted up to 60% of AGI—a provision that is now permanent. This allows donors to “top off” their giving with cash if they’ve reached the limit for appreciated assets.
Non-Itemizers: A Modest Benefit Ahead
For those who do not itemize, a new rule beginning in 2026 will allow a small deduction—$1,000 per individual or $2,000 for married couples filing jointly—for gifts to public charities. However, this benefit does not apply to contributions to donor-advised funds.
Bottom Line: Year-end giving is about making a difference—and with significant changes on the horizon, 2025 is an opportune year to review your charitable strategy. Accelerating contributions to public charities, including donor-advised funds, or private foundations can help you maximize impact while supporting the causes you care about most.
Reach out to your Fiduciary Trust officer or Sid Queler (queler@fiduciary-trust.com) if you would like to discuss your charitable giving strategy.
