Maximize Your Charitable Impact In 2025 Before The New Tax Changes

With the passage of the One Big Beautiful Bill Act (OBBBA), new tax changes will take effect in 2026, significantly impacting how individuals and corporations approach philanthropy. The new law aims to simplify the tax code but also introduces thresholds and limitations that reduce financial incentives for charitable giving.

That’s why 2025 presents a unique opportunity for donors to maximize their impact, especially through donor advised funds (DAFs).

What’s Changing Under The New Tax Law?

Starting in 2026, several provisions will reshape charitable giving:

Tax Rates: The tax rates from the 2017 Tax Cuts and Jobs Act (TCJA) are now permanent and indexed to inflation beginning in 2026.

Standard Deduction: The standard deduction increased to $16,100 for single filers, $32,200 for joint filers, and $24,150 for heads of households.

Non-Itemizer Charitable Contribution Deduction: For those taking the standard deduction, a new charitable deduction begins in 2026 at $1,000 for single filers and $2,000 for joint, but can’t be made to a DAF.

SALT Deduction Cap Increase: The cap rises from $10,000 to $40,000, benefiting high-income earners in states like NY, NJ, and CA, though it phases down for those with AGIs over $500,000.

Charitable Deduction Limitations: Starting in 2026, a 0.5 percent AGI floor is set before a charitable deduction applies, and for the highest tax bracket, deductions cap at 35% of AGI.

Permanent 60% AGI Limit for Cash Gifts: This favorable rule stays, allowing donors to deduct cash gifts to public charities and DAFs up to 60% of AGI.

Corporate Giving Threshold: C corporations must give more than 1% of income before deductions apply.

Exemption Amount: These changes don’t eliminate charitable benefits, but they make 2025 crucial for planning.

Why 2025 Is a Strategic Year for Giving

Since many new tax law provisions begin in 2026, 2025 is the last year to give under current, more favorable rules. This creates an opportunity for donors to:

Open or Contribute to a Donor Advised Fund: Fund a DAF in 2025, take the full deduction now, and recommend grants over time, even if future deductions decrease.

Bunch Contributions: Consolidate years of giving into 2025 to exceed the itemized deduction threshold and gain a larger tax benefit.

Donate Appreciated Securities: Avoid capital gains tax and receive a full fair-market-value deduction (subject to a 30% AGI limit).

Review Estate Planning: Use charitable gifts to manage taxable estates, especially with changing federal and state exemptions.

As Lee Cohen, CPA and CEO of LMC said during a recent JCF webinar, “2025 is a pivotal year for philanthropic planning. The changes coming in 2026 will make it more important than ever to be strategic about how and when you give.”

How Donor Advised Funds Help You Stay Ahead

A donor advised fund at Jewish Communal Fund offers donors a full tax deduction in the year of contribution, the flexibility to recommend grants anytime, and access to tax-smart giving strategies, including donating appreciated stock.

For example, a donor who usually gives $25,000 annually could contribute $75,000 to a DAF in 2025, receive the full deduction under current rules, and then make grants over the next several years. This method preserves tax benefits while ensuring consistent support for key causes.

“Opening or contributing to a donor advised fund now lets you set aside funds for giving under favorable tax rules,” said Rachel Schnoll, CEO of Jewish Communal Fund. “Even if tax incentives change, you can continue supporting the organizations you care about because you’ve already committed.”

Why Giving Jewishly Matters

Philanthropy is deeply rooted in Jewish tradition and cultural values. Giving Jewishly ensures crucial cultural, educational, and social service programs receive the resources they need. Jewish giving strengthens communities, supports the continuity of traditions, and addresses specific needs within the Jewish population. This form of targeted philanthropy nurtures growth and resilience, both locally and globally.

With a JCF donor advised fund, you can give to any 501c3. Even when giving to secular organizations and causes, your grant will come from Jewish Communal Fund and be recognized as a gift from a Jewish donor.

Each year, JCF makes a $2 million gift from our revenue to UJA-Federation of NY for their annual campaign, and another $1 to $2 million to local and global Jewish causes.

Planning Without Panic

While 2025 is optimal for giving, it’s important not to see the new tax law as a reason to stop giving in 2026 and beyond. Philanthropy will remain a powerful tool for impact, and donor advised funds will continue offering flexibility, efficiency, and long-term value.

The key is to plan ahead and work with financial and tax advisors to determine the best strategy for your unique situation.

Next Steps for Fundholders and Advisors

•          Talk to your tax advisor about how the new tax law and charitable giving intersect with your 2025 plans.

•          Identify appreciated assets for donation to maximize tax efficiency.

•          Consider front-loading your DAF to lock in current tax benefits while maintaining future giving flexibility.

•          For business owners, decide whether giving should be personal or through your entity, especially with new corporate giving floors.

At JCF, we’re here to help you navigate these changes and ensure your giving remains impactful, efficient, and aligned with your values. Contact JCF at JCFNY.org/contact or call 212-752-8277. n

The information contained in this publication is provided for general informational purposes only and should not be construed as financial, legal, or tax advice. Readers are encouraged to consult with a qualified financial advisor, accountant, or attorney regarding their specific circumstances. The publisher and contributors assume no responsibility for any actions taken based on the information provided herein.