If you have made a significant number of grants this year from your DAF at Truman Heartland Community Foundation, you’ll want to plan to make donations back into your fund before the end of the year due to some tax changes that will take effect in 2026.

As the year draws to a close, donors with a DAF have an important opportunity. By moving charitable dollars into your fund before the end of 2025 instead of waiting, you not only leverage the flexibility of your DAF but also secure the full value of your charitable tax deductions in light of the changes to come. According to charitable giving expert Dr. Russell James, for many donors, both timing and strategy matter more than ever this year.

2025 is the Last Chance for Higher-Value Deductions

Beginning in 2026, more people will be able to itemize, but itemized charitable deductions will be worth less than they are today. Here’s why:

• You’ll lose deductions for gifts below 0.5% of your Adjusted Gross Income (AGI).
• If you’re in the top tax bracket, deductions that count at 37% this year will only be valued at 35% next year.

Neither of these limits apply this year. As Dr. James emphasizes in a recent publication, “If you’ve got flexibility, then pulling charitable gifting into 2025 makes more sense.” By contributing to your DAF before the end of 2025, you lock in the stronger deduction rules and position yourself for even greater giving power later.

2025 is now the perfect target year for planning a large charitable gift.  State and Local Tax (SALT) deductions were recently expanded up to $40,000, and this change applies in 2025,  making it easier for more donors to surpass the standard deduction threshold and itemize.

The Power of Bunching

One of the most effective charitable tax strategies is “bunching,” or grouping several years of charitable gifts into one target year. This allows you to itemize deductions in that year and then use the standard deduction in future years.

For example, imagine you typically give $10,000 annually over four years but have no other deductions. With a $15,000 standard deduction, those annual donations would not reduce your taxes. However, if you instead bunched all four years of giving—$40,000—into 2025, you could deduct the full amount immediately, then take the standard deduction the following three years. That creates $25,000 in additional deductions that would otherwise be lost.

Your DAF makes bunching simple. You can move assets into the fund now—capturing the full tax benefit in 2025—while continuing to recommend grants to your favorite charities over time.

Take Action Before Year-End

Your generosity sustains nonprofits across our community, and your DAF at Truman Heartland Community Foundation makes it easy to act strategically. By contributing into your DAF before December 31st, you preserve the maximum tax benefits available, strengthen your future giving capacity, and ensure your philanthropy continues making a lasting difference.

Remember, even if you never itemize, you can still receive substantial tax benefits when you give appreciated stock instead of selling it.  And if you are itemizing, you get to use the full charitable deduction, too.

Plan Your Next Step

As 2025 winds down, the window of opportunity for maximizing your charitable giving is closing, too. Whether through bunching, contributing appreciated stock, or simply adding to your Donor Advised Fund, acting now ensures you capture the strongest tax advantages available before the rules change in 2026.

 At Truman Heartland Community Foundation, we’re here to help you make the most of this moment. To discuss strategies tailored to your giving, contact Diana Castillo, VP of Community Impact, castillo@thcf.org  or 816-912-4184 today.