The 2025 giving season highlighted a shift in philanthropy. Donors are giving more than ever and more intentionally and strategically than ever, too. According to DAFgiving360, donor-advised fund (DAF) holders granted $9.9 billion to more than 165,000 charities, an increase of 28% of dollars given from 2024 and the largest in the organization’s history. 40% of grants were scheduled as recurring contributions, signaling a trend toward sustained impact rather than one-time donations or last minute, end of year donations.
Why DAFs make sense?
Donor-advised funds have become a central tool for modern philanthropy because they combine flexibility, impact, and tax efficiency:
- Immediate tax benefit: Contribute cash or appreciated assets into a DAF before December 31 to claim a deduction in the current tax year (60% of AGI for cash and 30% of AGI for non-cash assets)
- Maximize value of appreciated assets: Donate stocks or other long-held investments to avoid capital gains tax while deducting full market value.
- Asset growth: Contributions can be invested and grown tax-free, potentially increasing the amount available for future grants.
- Strategic timing: Recommend grants to multiple charities over months or even years. You have flexibility and control on granting timeline.
Diversifying Concentrated Stock Positions: Many donors hold large, concentrated stock positions with large, unrealized capital gains. By donating a portion of the stock to a DAF you may reduce concentration risk:
- The DAF can sell the stock without tax ramifications, avoiding the capital gains tax trigger.
- You still receive the deduction for the full market value of the stock donation (up to 30% of AGI).
- The proceeds can then be invested inside the DAF how you want, allowing for diversification and tax-free growth moving forward.
- The funds are then ready to be used in a flexible, multi-year philanthropic plan.
(If you’d like to learn more, Neil and I dive deeper into one of our case studies from 2025 here)
In 2025, 74% of DAF contributions were non-cash assets. 77% of assets in DAF accounts were managed and serviced by advisors like us.
Planning ahead for 2026!
The One Big Beautiful Bill Act introduces some important changes to tax laws, especially when it comes to charitable giving. There is now a small, universal, above the line deduction ($1,000 for single filers and $2,000 for joint filers), as well as a 0.5% AGI hurdle and tax deductions are now capped at 35% compared to the previous 37% for high earners.
As these new laws are now upon us, let’s make sure we have thoughtful conversations about philanthropy sooner rather than later. Let’s be intentional with our giving strategy, aligning our generosity with our values, legacy, tax planning, and overall financial strategy.
For more information about giving, please visit the DAFgiving360 guide.
About the Author
Kawika Shoji is an investment advisor and portfolio manager at Regency Capital Management. He advises individuals, families, retirement plans, and institutions to assess, develop, and implement their investment and financial goals.
