Year-End Giving in 2025: What to Know Before Tax Laws Change – and How a Donor Advised Fund Can Help
As 2025 draws to a close, many donors are taking a fresh look at their charitable plans, especially with new federal tax rules scheduled to take effect in 2026. For those who already itemize deductions or tend to make larger charitable gifts, next year’s changes may reduce the value of future charitable deductions. Fortunately, gifts made before December 31, 2025 fall under the current, more favorable rules.
What Changes in 2026?
Beginning next year a portion of charitable deductions, equal to 0.5% of adjusted gross income, will no longer be deductible. And for those in the top bracket, the benefit of charitable deductions will be calculated at 35% rather than today’s 37%. These changes matter most for donors who make significant gifts, those in higher income brackets, and anyone who incorporates charitable giving into broader tax planning.
The Opportunity Before Year-End
Because gifts made now are treated under current law, timing is key. Donors may want to consider making cash gifts, multi-year commitments to All Charities, or meaningful contributions to Foundation Funds or other nonprofits before the end of 2025.
One of the simplest ways to secure today’s tax benefits — while preserving complete flexibility for future giving — is through a Donor Advised Fund (DAF).
Why a Donor Advised Fund Makes Sense Now
Opening an ORCF Donor Advised Fund before December 31 allows donors to:
• Make one contribution before rules change
• Receive this year’s deduction immediately
• Recommend grants over time, whenever they choose
DAFs have no distribution requirements, allowing donors to time contributions for optimal tax advantage and develop philanthropic plans at their own pace. It’s a strategy especially appreciated by those who also maintain private foundations with annual payout requirements. And, uniquely, ORCF offers these funds with no fees thanks to our Administrative Fund, a benefit not typically found among community foundations or commercial sponsors.
Once your fund is established, the Foundation handles the administrative work, provides consolidated statements, and ensures your grantmaking goes smoothly. Donations can be made to any qualified U.S. charity, giving you both convenience and flexibility long after year-end.
For Donors Age 70½ and Older
Qualified Charitable Distributions (QCDs) from IRAs remain unaffected by the 2026 changes and often provide the most tax-efficient way to give. QCDs reduce adjusted gross income directly and can be used for cash gifts to ORCF and All Charities, though they cannot be contributed to a DAF.
Key Takeaways
• The value of itemized charitable deductions will decrease starting in 2026.
• Making charitable gifts before December 31, 2025 may offer stronger tax benefits.
• An ORCF Donor Advised Fund, available with no fees, allows donors to secure today’s deduction while giving at their own pace.
• QCDs continue to be an excellent option for eligible donors seeking tax-efficient giving.
To open your Donor Advised Fund and secure your 2025 tax deduction, simply drop off, transfer, or postmark your contribution by December 31. Our team can finalize the simple fund agreement in the new year. To learn more, visit us on the first floor of the Ocean Reef Business Center, email foundation@oceanreef.com, or call (305) 367-4707.
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