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A version of this article first appeared in CNBC’s Inside Wealth newsletter by Robert Frank, a weekly guide for high-net-worth investors and consumers. Sign up to receive future editions directly to your inbox.
Strong stock market returns and tax reform boosted charitable giving in 2025, according to DAFgiving360, one of the largest operators of donor-advised funds.
The organization reported that donors gave a record $9.9 billion to charities in 2025, an increase of $2.2 billion (28%) from the previous year.
Donors can donate cash or assets to a donor-advised fund (DAF) and receive an immediate tax deduction before deciding how to distribute their gift to the charity. For donors who want to sell valuable assets without paying capital gains taxes, it’s much easier to donate stock or other non-cash assets to a DAF than directly to a nonprofit. The asset continues to increase in value until the donor-advised fund makes a grant to the charity.
Julie Sunwoo, president of DAFgiving360, told CNBC that a record 74% of donations last year came in the form of non-cash assets such as ETFs, index funds, real estate and cryptocurrencies.
“If you have assets that have high value or are difficult to liquidate, DAFs are really good at helping people do that, putting it into their portfolio and really making a plan around how they want their philanthropy to be successful over time,” she said.
Sonu attributes much of the surge to the July enactment of President Donald Trump’s One Big Beautiful Bill Act, which cuts some tax breaks for high-income donors starting in 2026.
Many lawyers and tax accountants who work with wealthy individuals last year advised their clients to increase their charitable giving to take advantage of expiring tax benefits. For high earners, the effective tax impact of charitable giving was reduced from 37% to 35%. Indiana University’s Lilly Family School of Philanthropy estimated last year that this cap alone would reduce endowments by $4.1 billion annually to about $6.1 billion.
Additionally, the bill limited the tax benefits for itemizers, allowing them to deduct only contributions that exceed 0.5% of their adjusted gross income. For example, a taxpayer with an income of $2 million won’t receive any tax benefits on the first $10,000 of annual contributions, according to tax planner David Perez.
Perez said he advised clients to fund their DAFs with three to five years’ worth of contributions before the tax changes take effect. Once your DAF is loaded with funds, you can spread out your donations among charities over several years.
He said he expects tax law changes to continue to drive donors away from checkbook philanthropy. For example, you can’t use a DAF to buy tickets to a gala or charity event, but Perez said if a taxpayer buys tickets directly from a charity, a portion of the tickets will be deductible. And while DAFs are convenient to set up, recommending a grant from a DAF takes more time and effort than writing a check, he said.
“If they really want to do it the right way, which is to use donor-advised funds, now they have to donate through that organization or vehicle,” he said. “They’re going to start thinking, ‘Why bother doing this?’
