How to Make the Most of Your Charitable Giving
Many people donate because they want to support causes they care about, but charitable giving can also be a strategic part of your financial plan. With recent tax changes and another year of record giving in the United States, now is a good time to understand how your generosity can also support your long-term goals. Americans gave an estimated $592.50 billion to charity in 2024, a reminder that philanthropy plays a major role in communities across the country.
Whether you give regularly or are considering a more intentional approach, thoughtful planning can help you maximize both your impact and your tax benefits.
Why Charitable Giving Matters in Your Financial Plan
Beyond the personal satisfaction of supporting meaningful work, charitable giving can create real financial advantages. It may reduce your tax burden, support your estate plan, or help shape the legacy you want to leave. Foundations contributed $109.81 billion of last year's total giving, and individual donors continue to fuel a large share of nonprofit funding, especially at year-end when roughly 40 percent of donations typically arrive.
When approached strategically, charitable giving becomes a tool that benefits both the causes you value and your broader financial picture.
Key Tax Benefits for 2025
Several updates for 2025 create new opportunities for donors:
Above-the-line Charitable Deduction
Due to the One Big Beautiful Bill Act, even if you don't itemize, you may be eligible to deduct up to $1,000 (single) or $2,000 (married filing jointly) in charitable contributions.
Adjusted AGI Floor for Itemizers
There is now a 0.5 percent AGI floor, meaning smaller donations may not be fully deductible, while larger gifts still offer meaningful tax advantages. Cash contributions to public charities can generally be deducted up to 60 percent of AGI.
Gifting Appreciated Assets
Donating long-term appreciated stock or similar assets allows you to avoid capital gains taxes and deduct the full market value.
Qualified Charitable Distributions (QCDs)
If you’re 70½ or older, giving directly from your IRA can reduce taxable income and satisfy required minimum distributions.
These strategies can help reduce taxes while directing more dollars to the causes you care about.
Smart Way to Plan Your Giving
A few intentional steps can help strengthen your approach:
Clarify what matters most.
Identify the issues or organizations you want to support so your giving feels focused and impactful.
Consider a donor-advised fund.
DAFs allow you to make a contribution, receive an immediate tax deduction, and distribute grants over time. In fiscal 2025, donors used DAFs to make 1.4 million grants to 155,000 organizations.
Bundle your giving.
Consolidating several years of gifts into one can help you exceed the standard deduction and maximize itemized benefits.
Coordinate with tax-loss harvesting.
Pairing donations of high-value assets with sales of underperforming investments can create a balanced, tax-efficient strategy.
Doing research on organizations such as Charity Navigator or directly reviewing annual reports can also help ensure your contribution is used responsibly.
Common Mistakes to Avoid
Even well-intentioned donors can miss key opportunities. A few pitfalls to watch for:
Not keeping receipts or documentation.
Giving without reviewing your overall financial plan.
Overlooking employer matching programs.
Making smaller gifts that fall below the new AGI floor without grouping them strategically.
A conversation with a financial advisor or tax professional can help you avoid these missteps and make the most of the rules that apply to your situation.
A Thoughtful Way Forward
Charitable giving is one of the most meaningful ways to support the people, causes, and communities that matter to you. When paired with thoughtful planning, it can also become a valuable part of your overall financial strategy. Whether your contributions are modest or substantial, taking a strategic approach ensures they have the greatest possible impact.
References
NPR. (2024). https://www.npr.org
Neon One. (2024). http://neonone.com
Tax Foundation. (2025). http://taxfoundation.org
Jones Walker LLP. (2025). http://joneswalker.com
DAF Giving 360. (2024). http://dafgiving360.org
Fidelity Charitable. (2024). http://fidelitycharitable.org
Charles Schwab. (2024). http://schwab.com
Greater Houston Community Foundation. (2024). http://ghcf.org
Bipartisan Policy Center. (2025). http://bipartisanpolicy.org
Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser, doing business as Middlebrook Wealth. Securities offered through NewEdge Securities, LLC, Member FINRA/SIPC. NewEdge Advisors, LLC and NewEdge Securities, LLC are wholly owned subsidiaries of NewEdge Capital Group, LLC. Middlebrook Wealth does not provide tax or legal advice. Therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation.
