Generosity in Action: A Framework for Charitable Giving in 2025

For many families, generosity is one of the most meaningful expressions of wealth. With upcoming tax changes on the horizon, 2025 offers a unique window to give with both heart and strategy.

💗Why People Give and Why It Matters

Most people don’t give solely because of tax rules.

Giving begins with gratitude — for the opportunities that shaped our lives, the causes that moved us to act, and the hope of teaching future generations the joy of generosity. Charitable giving turns wealth into impact. It reflects not just what you have, but what you value.

But 2025 also presents a strategic reason to align generosity with planning.

2025 is the final full year before new charitable deduction limits take effect.

That makes now an ideal time to clarify your purpose, refine your strategy, and give in ways that make a lasting difference, both personally and financially.

🗓️Understand Why 2025 Is Unique

Beginning in 2026, new federal tax rules will modestly limit charitable deductions:

That makes 2025 a valuable year to act. If you anticipate higher income this year — perhaps from a bonus, business sale, or stock vesting — it may be wise to accelerate charitable contributions before these limits apply.

Next Steps in 2025

• Estimate your income and deductions for the year
• Consider accelerating multi-year giving into 2025
• Identify appreciated investments suitable for donation

Acting in 2025, before the tax law changes, can allow you to give more strategically — and in many cases, at a lower after-tax cost.

For a valuable checklist to better optimize your charitable giving strategy, check out:

🎁Choose How to Give, Not Just How Much

The most generous families often share one thing in common: they give intentionally.
That means thinking beyond the amount of a donation to consider how to make each gift most effective.

The form of your gift can dramatically affect both impact and tax efficiency.

Three smart approaches worth exploring

1. Donate Appreciated Investments

If you’ve held stocks, ETFs, or mutual funds that have grown significantly, consider donating them directly to charity. This approach lets you avoid capital gains taxes while deducting the full fair-market value, allowing more of your wealth to reach the cause itself.

2. Use a Donor-Advised Fund (DAF)

A DAF acts like a charitable investment account. You can make a single large contribution in 2025, claim the deduction now, and distribute funds to charities over time. It’s a flexible way to give in a high-income year without rushing to decide exactly where every dollar should go.

3. Make a Qualified Charitable Distribution (QCD)

If you’re age 70½ or older, you can donate up to $105,000 per person directly from your IRA. This counts toward your required minimum distribution (RMD) but isn’t included in taxable income, a powerful tool for retirees looking to balance generosity and tax efficiency.

Next Steps for 2025

• Review your taxable investment holdings for appreciated positions
• Confirm whether a DAF could simplify multi-year giving
• Ask your advisor to coordinate any IRA-based gifts before year-end

💥Give at the Right Time: The Case for “Bunching”

With today’s higher standard deduction, many families no longer itemize — which can make charitable gifts feel less impactful from a tax perspective.
A strategy called “bunching” one way to change that.

By combining several years of planned donations into 2025, you can exceed the standard deduction threshold this year and take a larger deduction — while still directing gifts gradually to the causes you care about.

This approach also helps charities plan, knowing future funding is secured.

📌 Planning Tip: Bunching charitable deductions for greater tax savings
A couple who typically gives $15,000 per year could contribute $45,000 to a donor-advised fund in 2025. They’d take a full deduction this year, and then recommend grants to their favorite nonprofits over the next three years.

Next Steps for 2025

• Run a “bunching” scenario with your advisor or CPA
• Review whether you itemized in 2024
• Project your planned gifts for the next three years

🎗️Align Giving With the Causes You Value

While tax strategy enhances giving, the heart behind it is what gives meaning.
Giving with purpose starts by connecting your resources to your relationships, passions, and vision for the future.

Before making large or recurring gifts, it can help to clarify your “why.”

Questions to Clarify Your “Why”

• What causes or communities feel most meaningful to our family?
• What issue do I most want to see changed in my lifetime?
• What experiences have moved me to act?
• Which organizations have had a direct impact on our lives?
• What values do I hope my giving communicates?

Personal understanding not only creates consistency, but it turns generosity into a shared expression of family values. Many families formalize these reflections through a Charitable Mission Statement.

“We support organizations that expand educational access and opportunity for children.”

Questions to Define Your “How”

• Do I want to focus locally, nationally, or globally?
• Do I prefer direct relief, systemic change, or education?
• Do I want to give quietly or engage through time and leadership?
• How do I define success, in lives improved or policies changed?
• How do I want to involve my children, as participants, learners, or future stewards?

Questions to Guide Action

• Which three causes matter most to our household, and why?
• What is our annual giving budget, as a percentage of income or in dollars?
• How will we evaluate our giving over time and adjust as goals evolve?

Choosing Charities To Execute Upon Your Vision

Use the Head + Heart + Impact lens as you evaluate specific organizations:

• Head: Is the organization transparent and well-managed?
• Heart: Does its mission genuinely resonate with your experiences and beliefs?
• Impact: Can you see the difference your support makes?

Websites like Charity Navigator, Candid (GuideStar), and GiveWell can help evaluate programs and outcomes. But trust and personal connection matters too, as the causes closest to home often bring the deepest meaning.

🎇Review and Revisit Before Year-End

The most effective giving plans are those that evolve.

Each year, revisit your giving to ensure it still aligns with your income, taxes, and evolving priorities.

Between now and December 31

• Confirm if you’ll itemize for 2025
• Identify assets suitable for donation
• Review appreciated holdings for donation
• Evaluate eligibility for charitable distributions from retirement accounts (QCDs)
• Engage family members in selecting causes
• Complete all transfers before mid-December to ensure 2025 credit
• Maintain written acknowledgment from charities for every gift above $250

Avoid These Common Mistakes

• Waiting until late December to start paperwork
• Giving cash, when appreciated assets are more tax-efficient
• Forgetting to verify nonprofit status
• Overlooking acknowledgment letters for tax reporting

🌟 Giving With Clarity and Confidence

At Affinity Financial, we help clients bring structure and purpose to generosity through five interconnected dimensions of giving:

1️⃣ Values – Why you give
2️⃣ Vehicles – How you give (cash, stock, DAF, trust)
3️⃣ Timing – When you give (now vs. later)
4️⃣ Tax Impact – How giving fits your overall plan
5️⃣ Legacy – The story your giving leaves behind

When these five dimensions align, generosity becomes more than a transaction — it becomes a reflection of your life, values, and vision.

Philanthropy is one of the financial decisions that blends emotion and strategy. It feels good and does good. By acting thoughtfully in 2025, you can amplify your generosity, optimize your taxes, and bring more meaning to your wealth.

Whether you’re supporting a cause close to your heart or creating a lasting legacy, a well-structured charitable strategy can help each gift carry forward what matters most.

If you’d like to explore how charitable giving fits within your broader financial plan, we can help you design a strategy that reflects both your values and vision, for this year and beyond.

Disclaimer: This article is for general informational purposes only and is not intended to provide, and should not be relied on for, legal, tax, or accounting advice. Please consult a qualified estate planning attorney or tax advisor regarding your individual circumstances.