We appreciate hearing that your clients are committed to their charitable giving plans, no matter what happens with the tax laws. Especially now, in the midst of so much community need, we’re grateful for your clients’ generosity that continues to improve the quality of life for everyone in our region.
Here are three topics that are on the minds of many advisors who serve charitable clients:
- Timing is everything, as it is often said, and that may very well be true for your clients’ charitable giving plans. 2025 is an important year to be absolutely sure you’ve reviewed clients’ charitable goals and evaluated those objectives against the changes in the tax laws affecting the charitable deduction. The One Big Beautiful Bill Act creates both challenges and opportunities, and you’ll want to know how the new laws impact each of your philanthropic clients.
- How can you spot clients who may prefer to keep all, or some, of their charitable gifts anonymous? Check out three sentiments commonly expressed by clients who would like to structure their philanthropy to remain under the radar.
- Buying artwork is on the rise among young professionals. Take a quick look at the tax dynamics and decisions involved when a client wants to use their artwork to support their favorite charities. With gifts of artwork on the IRS’s radar recently, you’ll want to be prepared for client questions.
Also, August is National Make-A-Will Month, which means it’s the perfect time to encourage your clients to review their estate plans. As you meet with your clients to update wills, trusts and beneficiary designations, remember that the team at San Diego Foundation (SDF) is here to help ensure that your client’s philanthropic intentions are well-documented and structured in the most effective way possible, both from a tax perspective and through the lens of community impact.
Timing is Everything: Mapping Out Clients’ 2025 Charitable Giving Plans
Major changes under the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, are creating complexity, opportunity, and, for some, urgency. The OBBBA reshapes both how much a client can deduct for charitable contributions and which clients can benefit from these deductions in the first place.
As always, our team is honored to be your first call when the topic of charitable giving arises in client conversations.
Evaluate whether the client could benefit from “bunching” charitable contributions in 2025
Many advisors are recommending that their clients address the OBBBA’s expansion of the standard deduction ($15,750 for single filers and $31,500 for married couples in 2025). A technique known as “bunching” charitable donations can be particularly useful.
For example, if a client typically donates $12,000 each year to charity, but the client’s other deductions do not push them over the standard deduction, the client could give $36,000 (three years’ worth of gifts) to a donor-advised fund at SDF in 2025. The idea is that the client can combine this gift with other deductions to substantially exceed the standard deduction, allowing the client to itemize and claim a much greater deduction for that year. Over the following two years, the client can take the standard deduction and lean on the donor-advised fund to distribute funds to favorite charities.
Note that the higher standard deduction will likely impact tax-motivated charitable giving, even with the expected uptick in the number of itemizers thanks to the OBBBA’s new state and local tax deduction allowances.
Look ahead to 2026 as you help clients plan for 2025
For your clients who continue to itemize deductions, 2026 will bring even further changes. Only charitable donations exceeding 0.5% of AGI will be deductible. For example, a couple with $225,000 in AGI would see their deductible charitable amount reduced by $1,125 per year. Although clients who are large-scale donors may find this change proportionately less impactful, clients making moderate or smaller-sized gifts might see a significant reduction in their eligible deductions. What’s more, under the OBBBA, high-income taxpayers will see their maximum tax benefit from charitable deductions calculated at a top marginal rate of 35%, down from 37%, starting in 2026.
These changes may prompt higher-income clients to lean heavily on bunching strategies in 2025 to maximize current tax advantages before stricter limits kick in.
Watch the fine print on the charitable deduction for non-itemizers
Under the OBBBA, starting in 2026, taxpayers who take the standard deduction will be able to claim a direct deduction for charitable giving up to $1,000 for single filers and $2,000 for married couples filing jointly. This provision mirrors temporary measures seen during the COVID-19 pandemic. Crucially, the deduction is limited to cash gifts made directly to qualified charities; donations of property or stock, and contributions to donor-advised funds, do not qualify.
This provision is certainly good news for the estimated 100 million Americans who do not itemize, which likely includes many of your clients. That said, gifts of appreciated stock and donor-advised funds are tax-effective and convenient charitable giving vehicles, and many clients may be disappointed that they can’t deploy these techniques to take advantage of this new deduction.
2025 certainly is shaping up to be an important year for helping your clients plan their charitable gifts. Reach out to our team at SDF to explore tools, including establishing your client’s donor-advised fund. And of course, always remember that regardless of the tax implications, your clients’ philanthropy addresses vital community needs—and this is a motivator that transcends any deduction.
Quiet Types: Spotting Clients Who Prefer to Give Anonymously
As you continue (or begin) conversations about charitable giving with your clients, one important question often arises: How would your clients like their giving to be acknowledged and recognized?
Based on each client’s unique goals, the desired level of recognition may vary. While most donors choose to give publicly, there are many situations where donors prefer to give anonymously. As a trusted advisor, it’s essential to understand how anonymous giving might factor into a particular client’s overall philanthropy plan. Of course, SDF is here to help.
Keep an eye out for the following client sentiments:
“We don’t want to get a ton of requests for charitable gifts. It’s overwhelming, and it makes us feel bad that we can’t do it all.”
Understandably, nonprofits often increase outreach efforts to ask for support in today’s challenging economic environment. Through a donor-advised fund, your client can recommend the extent to which personal information is shared with recipient organizations. In many cases, our team can customize outgoing communications to grantee charities while also ensuring that your clients receive meaningful updates (such as thank you notes, impact reports, and success stories).
“We don’t want our colleagues, friends and even some of our family members to be able to see how much we give or where we give it.”
Some clients value privacy and choose to keep their giving and financial capacity under the radar. Donor-advised and other fund information remains highly confidential. Unlike private foundations, which require public reporting, donor-advised and other types of funds at SDF can can help keep donor identities, grantee identities and fund balances private.
“We want to make a big difference, but we want to do it without drawing a lot of attention to ourselves.”
For some donors, charitable giving is about honoring a loved one or building a family legacy, rather than personal recognition. These donors may want to make grants in a different name, such as a family name or in memory of someone significant.
Working with SDF, whether it’s through a donor-advised or other type of fund, offers your clients a great deal of flexibility in how a family’s gifts will be recognized. Your clients can pick and choose which gifts they want to make public and which they want to keep anonymous. Clients can also make gifts that are publicly announced in honor of family members or using a generic foundation name.
We collaborate with attorneys, CPAs and financial advisors, providing resources and support to ensure your clients can give to their favorite causes with the level of recognition and privacy they desire.
Gifts of Artwork: Worth a Look, But Be Careful
If you’ve noticed a surprising uptick in recent years among your younger clients investing in artwork, it is not your imagination! A survey of 1,007 U.S. high net worth individuals (each with at least $3 million in investable assets) found that 83% of respondents aged 43 and under said they currently own or would like to own art (compared with only 34% of those older than 43).
As you work with this subset of clients who are also charitably minded, you’ll want to be generally aware of the rules surrounding gifts of artwork to charity. When handled appropriately, artwork donations can provide notable benefits for both your client and favorite causes. The process for these gifts, however, comes with unique complexities, ranging from a client’s emotional attachment to the IRS’s watchful eye on donations involving historically misvalued or fraudulent art gifts.
Here are three ways to approach helping a client leverage an investment in artwork for charitable purposes:
The client donates the artwork directly to a charity for “related use”.
If your client donates art held for more than one year directly to a museum or institution that uses it as part of its mission (for example, displaying the art in public collections or exhibitions), the charitable tax deduction can be based on the fair market value at the time of the gift, which could deliver a significant upside for your client. “Related use” rules are strict. The artwork must enhance or be central to the organization’s mission. Donated pieces valued over $500 require your client to file an IRS Form 8283, and gifts valued over $5,000 also require a qualified appraisal. Note also that if the charity sells the piece within three years of making the gift, the deduction could be retroactively reduced.
The client gives the artwork to a charity for it to sell.
If your client gives artwork to a charity that will sell the artwork rather than use it in programming, the deductible amount is limited to the lesser of the fair market value or the client’s original cost basis. While the tax deduction might not be as high as the client would like, the advantage of this route is that it offers flexibility, both related to the recipient organization (such as a donor-advised fund at SDF) as well as the use of the proceeds from the artwork’s sale. Your client still must follow the IRS reporting and appraisal rules.
The client sells the artwork and then gives the proceeds to charity.
This is often an unattractive option from a tax perspective, but it is certainly an option, especially if maximizing a deduction is less critical than avoiding the complexities of gifting artwork. Although the cash gift will be eligible for a charitable tax deduction, the client will incur capital gains tax on the appreciated value of the art, reducing the net financial benefit of the gift.
As with any gift of hard-to-value assets, the best approach for donating artwork is highly dependent on the individual client’s art collection, tax situation, and charitable goals. Our team is always happy to serve as a sounding board for charitable gifts of all kinds.
Learn More
For 50 years, we have partnered with an extensive network of wealth advisors, estate planning attorneys, tax planners and other financial advisors to help high-net-worth clients and families achieve financial planning objectives and charitable giving goals while maximizing tax deductions.
If you want to learn how we can help meet your clients’ financial planning and charitable giving goals in 2025, contact me at (858) 245-1508 or jrogers@sdfoundation.org.
