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Year-end giving, or “Giving Season,” refers to the last two months of the year when incoming charitable donations increase dramatically. Overall, approximately 30% of annual giving occurs in December, and 10% occurs in just the last three days of the year.

It’s undeniable that charitable giving greatly benefits society as a whole, but did you know it can also directly benefit the donor? Besides the irreplaceable feeling of warmth and purpose that comes with helping others, charitable giving can also provide financial benefits to the donor, such as reducing taxable income. If you’ve been looking for ways to lessen your tax burden, consider increasing your charitable giving in December. This is a good strategy because you can deduct the donations you make during this month from this year’s income.

The Tax Benefits of Charitable Giving

The U.S. tax benefits for charitable giving were implemented in 1917. Of course, this has continually incentivized the practice, thus increasing overall donations year after year. However, according to the Tax Foundation, the One Big Beautiful Bill Act establishes a new floor for charitable contribution deductions. Starting in 2026, philanthropic donations below 0.5% of Adjusted Gross Income (AGI) will not be deductible.

Take, for example, a taxpayer with $200,000 of AGI and $10,000 in charitable giving. The first $1,000 of the taxpayer’s charitable giving would not be deductible (calculated by multiplying their $200,000 of income by 0.5%), but anything over that amount—in this case, the remaining $9,000—would be.

So, how do you take advantage of the tax benefits for charitable giving, specifically in 2025? One idea is to bunch five years’ worth of planned donations into a single contribution to a Donor-Advised Fund (DAF) this year. This would preserve the deductibility of that $1,000 for each of the next five years.

Despite these impending changes, don't forget to start with the basics this December. For example, remember that to deduct contributions from your yearly federal taxable income, you must meet the following criteria.

• 501(c)(3) Status: Ensure that the organizations you donate to are eligible. Most charitable contributions to 501(c)(3) organizations are deductible.
• Itemizing Deductions: Charitable contributions are only deductible if you choose to itemize your deductions on Form 1040, Schedule A, instead of taking the standard deduction.
• Documentation: Keep detailed records of your donations, including receipts or acknowledgments from the charitable organization. For donations of more than $250, you typically need a written acknowledgment.
• Cash and Non-Cash Contributions: Different rules apply to cash and non-cash donations. For non-cash items, such as clothing or property, additional documentation may be required, and the deduction is usually based on the fair market value.
• Appraisal for High-Value Donations: If you donate property worth more than $5,000, you may need to obtain a qualified appraisal.

If you have not been participating in year-end charitable giving, especially if you are a high-net-worth individual, read the tips below and start implementing them this year or planning for next. ‘Tis the season! This is a great opportunity to give to the causes near and dear to your heart, and it doesn't hurt that you will receive something in return!

Tips for Participating in Year-End Charitable Giving

Stick to a budget.

During this time of year, it’s extra important to track how much money is coming in, how much is going out, and where it’s going. Your expenses will likely increase exponentially due to holiday gifts, travel, food, decorations, and so on. It’s advisable to plan and budget for your usual holiday spending so you don’t go overboard. Once you have that set, you’ll know how much you have left over to donate.

Choose your charities.

First, decide whether to donate all your budgeted funds to a single charity or multiple organizations. Many people start by addressing local needs in their community. Identify what causes are important to you, then find legitimate organizations that offer support in these areas. Just be sure to do thorough research. Unfortunately, more fraud occurs during the holidays. All charities should have readily available disclosures that you can review. Find out what percentage of an organization’s spending goes to its mission versus other expenses. You want your money to go where it will do the most good.

Consider a QCD.

If you are retired and over 70½ years old, you can direct some or all of your annual required minimum distribution (RMD) to a 501(c)(3) organization. This is known as a qualified charitable distribution (QCD). This is a great opportunity for those who can take advantage of it because you can send the distribution directly to the charity and avoid recognizing it as taxable income.

Ask about donation matching.

Want to give your chosen charities even more bang for your buck without going over budget? Some employers have programs that match employee donations. If you’re unsure about your workplace, it’s worth inquiring. Leveraging these programs to direct more support toward the causes you care about is a no-brainer.

Year-end charitable giving is a great way to honor the sentiments behind this season’s typical celebrations. To maximize the impact of your generosity, discuss your donation plans with your financial advisor today. They can help you plan and work charitable giving into your strategy in the best way possible.