Navigating New Laws: Opportunities for Donors in 2025

Written by Robin Elmerick, Senior Director of Effective Philanthropy

It’s more important than ever to stay informed about how changes in the tax law may affect your charitable giving. The recently-passed One Big Beautiful Bill Act (OBBBA) creates challenges as well as opportunities for structuring your philanthropy. We encourage you to reach out to your attorney, CPA, and financial advisor to evaluate how the changes in the law impact your own situation. 

As always, the CICF Collaborative (which includes Central Indiana Community Foundation, Hamilton County Community Foundation, IMPACT Central Indiana, the Indianapolis Foundation, and Women’s Fund of Central Indiana) is happy to work side-by-side with you and your tax advisors to build a plan for 2025 and beyond that not only supports your plans to make a difference in the community, but also addresses the rule changes under the OBBBA. 

To help you along this journey, we’ve provided the checklist below of issues to discuss with your advisors. 

Evaluate whether “bunching” may be right for you. 

The OBBBA increases the 2025 standard deduction to $15,750 for single filers and $31,500 for married couples filing jointly. The higher standard deduction will likely impact tax-motivated charitable giving, even with the expected uptick in the number of itemizers thanks to the OBBBA’s state and local tax deduction allowances (subscriptions required to the Wall Street Journal). There are important exceptions and nuances to consider, which you’ll want to discuss with your advisors. For example, if you are 65 or older, you’re eligible to receive an additional $6,000 “bonus” deduction—but it begins to phase out if your modified adjusted gross income (MAGI) exceeds $75,000. 

Based on the increases to the standard deduction, you may want to talk with your tax advisors about “bunching” charitable gifts for 2025 using  your donor-advised fund.). Through this technique, you can make several years’ worth of charitable contributions in a single year to exceed the standard deduction threshold, thereby maximizing tax benefits in that year. Over the following years, your donor-advised fund can distribute grants to charities over time according to your wishes.  

There are more reasons you might want to talk with your advisors about front-loading charitable contributions in 2025. In 2026, a new provision under the OBBBA takes effect that allows you to take a deduction for charitable gifts only to the extent that your giving exceeds 0.5% of your AGI. What’s more, if you’re in the highest tax bracket, 37%, you can still only deduct charitable contributions at the 35% rate.  

The upshot here is that you and your tax advisors may decide that 2025 is the year to bunch charitable contributions to maximize tax savings.  

Get familiar with the deduction for non-itemizers, coming next year.  

If you don’t itemize your deductions, you’ll be glad to know that starting in the 2026 tax year you can claim a deduction for cash gifts to qualifying public charities—up to $1,000 for single filers and $2,000 for married couples filing jointly. Excluded from this new provision are gifts to donor advised funds and noncash gifts, which is unfortunate because those vehicles are popular, convenient, and tax-effective. Still, keep in mind the new deduction, and, if you’re encouraging your adult children to get involved in philanthropy, make sure they are aware of this deduction. It could be particularly helpful for young people because many young people do not yet itemize.   

If you are over 70 ½, review the benefits of Qualified Charitable Distributions. 

A Qualified Charitable Distribution (QCD) enables individuals aged 70 ½ or older to donate up to $108,000 per year (as of 2025) directly from an IRA to eligible charities, and in the process exclude the donated amount from taxable income altogether–rather than relying on an itemized deduction. QCDs may be especially advantageous after the OBBBA’s significant increase to the standard deduction because QCDs provide a direct tax benefit regardless of whether you itemize or take the standard deduction. Indeed, using a QCD to fulfill required minimum distributions (RMDs) can lower your adjusted gross income, potentially reducing taxes on Social Security income and Medicare surtaxes and helping you sidestep the new floors and caps on itemized charitable deductions imposed by the OBBBA starting in 2026. As a reminder, a QCD cannot be made into your donor-advised fund. 

We are happy to collaborate with you and your tax advisor as you explore ways to achieve your philanthropic goals under the new laws. We look forward to hearing from you!  

About the CICF Collaborative 

CICF Collaborative is a partnership of philanthropic organizations working together to strengthen communities across the region. Each entity within the CICF Collaborative (including the cornerstone entities, Central Indiana Community Foundation, Hamilton County Community Foundation, IMPACT Central Indiana, the Indianapolis Foundation, and Women’s Fund of Central Indiana) brings deep knowledge, strong relationships, and its own individual, focused mission. The CICF Collaborative unities the entities by providing shared services, allowing the entities to operate more efficiently and effectively. By leveraging what we each do best, we’re able to better serve our communities and create more lasting impact, together. Learn more » 

About the Author

Robin Elmerick, senior director of effective philanthropy, has been with CICF since 2019.  A certified Impact Philanthropy Advisor, she works closely with fundholders across all entities of the CICF Collaborative to help them define their philanthropic strategies and maximize their impact. With a background in nonprofit leadership and consulting, she is passionate about bridging the needs of the community with the missions of nonprofits and the passions of our fundholders, aligning all three to create meaningful change in Central Indiana and beyond.