The Right Moves, Right Now
The “One Big Beautiful Bill” Act (H.R.1), signed into law in July 2025, will have a significant impact on charitable planning. Advisors who initiate the conversation now can help clients capitalize on one of the most advantageous giving windows in recent memory.
Beginning in 2026, new limits on itemized deductions and changes to charitable thresholds will alter how donors approach giving. Before then, high earners and philanthropically minded clients can still take full advantage of existing rules, maximizing both their philanthropic impact and their tax efficiency.
The 2026 Shift: What’s Changing
H.R.1 introduces several provisions that reshape how charitable deductions work:
- A 0.5% AGI floor for charitable deductions. Donors must give at least 0.5% of their adjusted gross income to claim any deduction.
- A 35% cap on the value of itemized deductions. For taxpayers in the top (37%) bracket, the value of charitable and other deductions will be limited starting in 2026.
- Universal charitable deduction. Beginning in 2026, all taxpayers can deduct up to $1,000 ($2,000 for joint filers) without itemizing—but gifts to donor-advised funds (DAFs), private foundations, and supporting organizations are excluded.
In short: generosity will remain tax-advantaged, but the parameters are narrowing. Advisors can add significant value by helping clients plan around these inflection points.
Why 2025 Is the Year to Act
The Value of Timing
Donors in the top (37%) tax bracket can capture the full deduction under current rules in 2025 before the new 35% limit takes effect. Similarly, gifts that might fall below the new 0.5% AGI floor in 2026 can be fully deductible if accelerated or bunched into 2025. For example, a donor with $5 million in AGI who contributes $1 million this year maximizes their deduction under the current rules. Waiting until 2026 could reduce the tax advantages associated with that same gift.
The Role of Donor-Advised Funds
Donor-advised funds (DAFs) are the ideal vehicle for this window. By contributing to a DAF in 2025, donors can claim the deduction immediately while maintaining flexibility to recommend grants over multiple years. This allows clients to accelerate giving for maximum tax benefit without forcing all charitable decisions at once.
The Power of Noncash Giving
Noncash giving can further enhance impact. Appreciated securities or other complex assets can be contributed to a DAF, allowing donors to avoid capital gains taxes while receiving the full deduction. Combining timing strategies with noncash gifts can further maximize philanthropic and tax benefits.
The bottom line: 2025 represents a rare window where generosity and the tax code align. Advisors who proactively guide clients on gift timing, bunching, and DAF strategies will help maximize deductions, preserve flexibility, and deepen client trust.
Strategies for Advisors to Guide Clients Now
- Identify clients in 37% bracket. Prioritize outreach for 2025 acceleration.
- Model 2025 vs. 2026 Scenarios. Use financial simulations to show the tax impact of accelerating gifts before the 0.5% AGI floor and the 35% limit on the value of itemized deductions take effect.
- Encourage “bunching” and front-loading. Consolidate several years of giving into 2025 to optimize tax benefits while sustaining multi-year grant plans.
- Leverage noncash gifts. Review portfolios for appreciated assets or concentrated positions that can be donated through a DAF.
The Bigger Picture: Purpose and Partnership
Tax incentives may shape timing, but purpose drives commitment. Advisors who incorporate charitable planning into financial strategy strengthen relationships, uncover investable assets, and create continuity across generations. With $84 trillion in wealth transferring from boomers to younger, impact-driven heirs, advisors who lead with philanthropic conversations will differentiate their practice and deepen trust.
The Bottom Line
In 2025 and 2026, the most effective advisors won’t just manage wealth. They will help shape legacies with impact far beyond the current calendar and upcoming deadlines.
National Philanthropic Trust stands ready to support advisors through the transition—offering expertise in charitable planning, complex asset gifts, and donor-advised fund management. For resources, guidance, and tools to help you start these conversations, visit DAF Insights for Advisors.
About the Author
Gil Nusbaum is NPT’s Chief Administrative and Legal Officer. He is responsible for a wide variety of general corporate legal, tax and risk management matters and for overseeing NPT’s illiquid gifts program.
NPT does not provide legal or tax advice. This blog post is for informational purposes only and is not intended to be, and shall not be relied upon as, legal or tax advice. The applicability of information contained here may vary depending on individual circumstances.
The Philanthropist
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