Charitable planning can’t wait until 2026

As we approach the end of 2025, financial professionals face a pivotal opportunity to help clients maximize charitable giving strategies before key tax provisions change. NAIFA’s recent joint webinar with the American Cancer Society, “Charitable Planning in 2025: Why the Rush?” brought together seasoned experts to explain what is changing, why it matters and how financial professionals can lead with confidence and care.

The panel featured attorneys Kathleen Bilderback, NAIFA trustee and counsel with Sandberg Phoenix and von Gontard, and April Caudill, advanced solutions director with Principal Financial Group, as well as Bobby Collier, senior vice president of philanthropy at the American Cancer Society. Together, they delivered timely insights on how to guide clients through the coming changes in tax law with strategies that also reflect their personal values and philanthropic goals.

Panelists said that one of the biggest factors driving urgency is the upcoming expiration of several provisions from the Tax Cuts and Jobs Act. After Dec. 31, 2025, taxpayers who itemize may deduct only the amount of qualified charitable contributions that exceed 0.5% of their adjusted gross income. For example, if the taxpayer’s AGI is $200,000, the first $1,000 of qualified contributions is nondeductible. Although the nondeductible portion may be carried over for up to five years, it may be deducted only to the extent the taxpayer’s charitable contributions exceed the 0.5% floor in future years. Additionally, the new limitation on itemized deductions for taxpayers in the top bracket will further reduce the tax benefits of charitable contributions after Dec. 31, 2025.

Corporate charitable deductions are also subject to a new limitation, the panelists said. After Dec. 31, 2025, corporations will receive deductions only for contributions that exceed 1% of their taxable income. The existing 10% of taxable income ceiling on corporate charitable deductions will continue to apply. Although the nondeductible charitable contributions may be carried forward for up to five years, future deductibility will be subject to the 1% floor and the 10% cap.

These upcoming changes could significantly affect clients who make large charitable contributions, making 2025 a critical year for action.

Make clients aware of changes in charitable deductions

It’s highly likely that many clients are not aware that these changes are coming, and that’s where financial professionals can step in. It’s a chance to educate, start the conversation early, and show the value of planning ahead. The sooner professionals act with their clients, the more options they will have and the better the results will be.

Several tools can help clients align their financial and charitable goals. Bilderback noted that donor-advised funds can be especially helpful for those who want to lock in a deduction this year while taking more time to decide how the funds will be distributed. Caudill added that charitable remainder trusts can generate income for donors while supporting meaningful causes. For clients over age 70½, qualified charitable distributions from individual retirement accounts remain one of the most tax-efficient ways to give.

Many clients already have a desire to give but are unsure how to structure their contributions in a way that aligns with their financial picture. Financial professionals can help clients identify which giving methods suit their broader plans, including retirement income, estate goals, and tax management.

Collier emphasized that charitable giving has benefits beyond the personal satisfaction of supporting a cause. Lowering adjusted gross income through charitable contributions can reduce Medicare premiums and additional tax surcharges. Charitable planning can also help mitigate required minimum distributions and estate tax exposure. When used thoughtfully, these strategies can support clients’ financial wellbeing and their legacy objectives.

The clear message from the panel was that timing matters. Waiting until late 2025 may limit options, especially for clients interested in more complex strategies like trusts or structured gifts. Financial professionals who start these conversations early are better positioned to implement plans that work both strategically and emotionally for clients.

Financial professionals have a unique opportunity to lead during this window of change. Charitable planning in 2025 is not just about compliance; it’s about helping clients make a lasting impact while managing their finances in a smart and meaningful way. There is still time to act, but the clock is ticking. Financial professionals who step up now will provide tremendous value to their clients and their communities.

Watch the full webinar recording here.