Many donors ask, “How can I have more money for charitable giving?” or “How can I lower my tax bill?” Here are 9 tax-smart, high-impact strategies for you to consider, many of which can be done even if you don’t itemize deductions for charitable donations on your tax returns. To simplify things, we’ve added labels to help you identify whether each strategy could be beneficial from a tax perspective for those who itemize tax deductions or take the standard deduction.
Giving Strategies for 2025 and Beyond
1. Donate appreciated non-cash assets instead of selling the assets.
Standard deduction | Itemized deductions
Donating appreciated stock, private business interests, real estate, and other non-cash assets held more than one year has two tax benefits. First, you generally eliminate the capital gains tax that you would otherwise incur if you sold the assets and donated the sale proceeds, increasing the amount available for charities by up to 20%. Second, if you itemize deductions when filing your 2025 tax returns, you may be able to claim a charitable deduction for the fair market value of the contributed assets.
2. Use a donor-advised fund to maximize your charitable giving.
Standard deduction | Itemized deductions
A donor-advised fund (DAF) account, such as with DAFgiving360, is a tax-smart and simple giving solution. A DAF provider is a public charity, and by contributing to a DAF account, you can potentially reduce your tax burdens, contribute assets for potential tax-free investment growth, and use contributions to recommend grants to other public charities immediately or over time. DAFgiving360 and other DAF providers also have specialized teams for accepting non-cash asset contributions.
3. Rebalance your investment portfolio using a part-gift, part-sale strategy.
Itemized deductions
Rebalancing often involves selling appreciated investments that have exceeded target allocations and using sale proceeds to buy more of the assets that have become underrepresented in a portfolio. To potentially reduce the tax liability of rebalancing, you can use a part-gift, part-sale strategy. This involves donating long-term appreciated assets in an amount that offsets the capital gains tax on the sale of appreciated assets and claiming a charitable deduction. The gifting part of this strategy can be implemented with a donor-advised fund.
4. Give through an individual retirement account (IRA).
Standard deduction
If you are age 70½ or older in 2025 and have a traditional IRA,1 each individual can give up to $108,000 directly to an operating charity through a qualified charitable distribution (QCD)2. There is no tax deduction for a QCD. However, a QCD will not count as taxable income and can also be used to satisfy your IRA’s 2025 required minimum distribution (RMD). Unfortunately, you cannot use this strategy with a DAF.3
5. Name your favorite charities as beneficiaries of a retirement account.
Standard deduction
Unlike individuals who inherit taxable retirement accounts, public charities don’t have to pay income tax on donated assets, making them ideal beneficiaries of IRAs or employer-sponsored retirement accounts. This means every penny of your donation will be directed to support your charitable goals after your lifetime. What’s more, designating a charity as beneficiary of the account assets will remove the assets from your taxable estate.
6. Offset your tax liability on a retirement account withdrawal.
Itemized deductions
If you plan on taking distributions from a tax deferred retirement but you can’t do a QCD because you’re under age 70½, you could use a charitable donation to potentially offset some or all of that distribution. A great way to make the donation is by giving appreciated assets held long term (see strategy #1). You won’t need to recognize income from the donation and then, if you itemize your deductions, you can take a deduction for the fair market value of the asset.
7. Donate life insurance one of two ways.
Itemized deductions | Standard deduction
If you have life insurance that is no longer needed, you can donate it to charity. By contributing your policy during your lifetime, and with a charity selling it, you’re able to use the value of the policy to benefit your favorite causes, while also claiming an income tax deduction and potentially reducing estate tax liability. You can also name a charity now to be a beneficiary of the policy after your lifetime, helping extend your charitable legacy and removing the policy from your taxable estate.
8. Bunch two or three years of charitable gifts into 2025.
Itemized deductions | Standard deduction
You may anticipate that your total itemized deductions for 2025 will be below your standard deduction amount. If you do, consider combining or “bunching” charitable contributions for two or more years into 2025 to create itemized deductions that exceed your standard deduction. With a two-year bunching strategy, you would itemize deductions on your 2025 tax return and take the standard deduction on your 2026 return to potentially produce a larger two-year deduction than you would get by claiming two years of standard deductions. A bunching strategy can be implemented with a DAF (see above), allowing you to continue giving to other charities each year.
9. Combine tax-loss harvesting with a cash gift.
Itemized deductions
If your investment portfolio has publicly traded securities that have declined below their cost basis (this generally is the purchase price), you can sell those assets at a loss and donate the cash proceeds to claim a charitable deduction. Then, through a process called tax-loss harvesting, you can use the amount of your loss to reduce your taxable capital gains and potentially offset up to $3,000 of your ordinary income. You may also carry forward any remaining loss amount to offset gains and income for future tax years.
What You Can Do Next
For questions or assistance with philanthropic planning or charitable giving, you and your advisors may:
- Visit the DAFgiving360 website
- Talk to a charitable specialist at 855-966-3764
- Follow DAFgiving360 on LinkedIn
Footnotes and Disclosures:
- 401(k), 403(b), and ongoing SEP or SIMPLE plans do not qualify for the QCD gift option, but assets from these accounts may be rolled over into a traditional IRA and thereafter gifted to charity using a QCD. ↩︎
- Donors cannot receive any benefits from making a QCD, such as courtside seats at a university’s basketball game, participation in a charity auction, or payment of fees for a charity golf tournament. Donors may be able to use a QCD to fulfill a donation pledge but should consult with a tax or legal advisor on specific limitations. ↩︎
- Operating charities, or qualifying public charities, are defined by Internal Revenue Code section 170(b)(1)(A). Donor-advised funds, supporting organizations, and private foundations are not considered qualifying public charities. ↩︎
The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.
Please be aware that gifts of appreciated non-cash assets can involve complicated tax analysis and advanced planning.
A donor’s ability to claim itemized deductions is subject to a variety of limitations depending on the donor’s specific tax situation. Consult a tax advisor for more information.
Contributions of certain real estate, private equity, or other illiquid assets may be accepted via a charitable intermediary, with proceeds transferred to a donor-advised fund (DAF) account upon liquidation. Call DAFgiving360 for more information at 800-746-6216.
Market fluctuations may cause the value of investment fund shares held in a donor-advised fund (DAF) account to be worth more or less than the value of the original contribution to the funds.
DAFgiving360™ is the name used for the combined programs and services of Donor Advised Charitable Giving, Inc., an independent nonprofit organization which has entered into service agreements with certain subsidiaries of The Charles Schwab Corporation. DAFgiving360 is a tax-exempt public charity as described in Sections 501(c)(3), 509(a)(1), and 170(b)(1)(A)(vi) of the Internal Revenue Code.
Contributions made to DAFgiving360 are considered an irrevocable gift and are not refundable. Once contributed, DAFgiving360 has exclusive legal control over the contributed assets.
DAFgiving360 does not provide legal or tax advice. Please consult a qualified legal or tax advisor where such advice is necessary or appropriate.
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