As the year winds down, many families take time to reflect on what matters most. For some, this season of reflection naturally turns into generosity — giving back to the organizations, charities, and causes that have made an impact in their lives.
Whether it’s part of a long-standing family tradition or simply a desire to make a difference, year-end charitable giving can be one of the most rewarding parts of the holiday season. With a little planning, it can also play an important role in your financial strategy, helping you maximize tax benefits while aligning your money with your values.
This guide will walk you through the most effective year-end giving strategies, key tax considerations, and how to make your generosity part of a bigger financial plan.
Why Year-End Giving Is So Important
Nonprofits and charities rely heavily on donations made in November and December. In fact, studies show that as much as 30% of all annual giving happens in December, with about 10% of donations made in the final three days of the year.
That means your support during this season doesn’t just feel good — it often arrives at a time when organizations need it most.
At the same time, many individuals are also reviewing their finances and looking for ways to make smart moves before December 31. Charitable giving can offer both:
- The chance to make a meaningful difference in your community.
- Potential tax advantages that help you start the new year on stronger financial footing.
Charitable Giving Options to Consider
There’s no one “right” way to give. The best method depends on your financial situation, your goals, and the organizations you want to support. Here are several of the most effective year-end giving strategies:
1. Cash Donations
Cash gifts are the simplest way to support a cause. You can write a check, make an online donation, or set up a recurring gift.
What to know:
- Keep records of all cash gifts — a receipt, bank statement, or acknowledgment letter from the charity is usually required for tax deductions.
- For 2025, cash gifts are generally deductible up to 60% of your adjusted gross income (AGI).
2. Donating Appreciated Assets
Instead of cash, consider donating appreciated investments like stocks, bonds, mutual funds, or ETFs.
Why it’s powerful:
- You avoid paying capital gains taxes on the appreciation.
- You still receive a deduction for the fair market value of the asset.
- The charity receives the full value of the donation.
This can be especially effective if you’ve held investments for several years and they’ve significantly increased in value.
3. Donor-Advised Funds (DAFs)
A Donor-Advised Fund is like a charitable investment account you fund with an irrevocable gift. You contribute cash or assets, receive an immediate tax deduction, and then recommend grants to charities over time.
Benefits include:
- Flexibility: Take the deduction this year while deciding later how and when to distribute funds.
- Simplicity: Consolidate your giving into one account instead of tracking multiple donations.
- Family engagement: DAFs can be used to involve children or grandchildren in charitable decisions.
4. Qualified Charitable Distributions (QCDs)
If you’re age 70½ or older, you can make a Qualified Charitable Distribution directly from your IRA to a qualified charity.
Advantages of QCDs:
- They count toward your Required Minimum Distribution (RMD).
- The amount given is excluded from your taxable income.
- They’re especially beneficial for retirees who may not itemize deductions.
Timing Matters for Year-End Giving
When it comes to year-end generosity, timing is everything. Certain types of donations — such as stock transfers or QCDs — can take several business days or even weeks to process.
If you wait until the last week of December, you risk missing the cutoff for that tax year. Starting earlier allows you to:
- Ensure your donation is processed on time.
- Avoid unnecessary stress or rushed decisions.
- Take time to thoughtfully choose which causes to support.
Aligning Generosity with Your Financial Plan
While tax benefits are helpful, year-end giving shouldn’t be about deductions alone. The most meaningful giving reflects your values and fits naturally into your broader financial plan.
A financial advisor may be able to help you:
- Identify the most tax-efficient giving strategies.
- Balance generosity with retirement, education, and other priorities.
- Incorporate charitable giving into estate or legacy planning.
- Engage family members in a thoughtful approach to giving.
Some families use charitable trusts or structured giving plans to provide support over many years. Others use giving as an opportunity to teach younger generations about generosity and financial stewardship.
Questions to Ask Before You Give
To make sure your year-end giving is both intentional and impactful, ask yourself:
- Which causes or organizations align most closely with my values?
- Do I want to make a one-time gift, or create an ongoing giving strategy?
- What’s the most tax-efficient way to give this year?
- How will this gift fit into my overall financial plan?
These questions can help transform your generosity from a last-minute donation into a thoughtful part of your financial life.
The Bottom Line
Year-end charitable giving is one of the best ways to combine generosity with smart financial planning. With the right strategy, you can support the organizations that matter most to you, take advantage of available tax benefits, and feel confident knowing your giving is aligned with your long-term goals.
At Keel Financial, we help clients design charitable strategies that are both impactful and sustainable. Because at the end of the day, giving isn’t just about money — it’s about creating meaning and legacy.
Reach out to our team today and let’s plan for the end of 2025.
Disclosures
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.
