The Future of Charitable Giving: Tax-Efficient Strategies and OBBBA Impacts-Slide handout

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Pdf Summary

This presentation by William Robinson from UI Charitable at NAPFA 2025 focuses on Donor-Advised Funds (DAFs) and their strategic use in charitable giving, especially for financial advisors working with clients. 

Key points covered include:

1. <strong>What is a Donor-Advised Fund?</strong>  
   A DAF is a charitable giving account allowing donors to make an immediate tax-deductible contribution of various asset types—including cash, securities, private business interests, real estate, and cryptocurrency—and then recommend grants to charities over time.

2. <strong>Benefits of DAFs versus Private Foundations:</strong>  
   DAFs have lower setup and administration fees, allow anonymous donations, have flexible succession plans, and provide a broader range of giving and impact investment opportunities. They also offer more favorable tax deduction limits compared to private foundations.

3. <strong>Impact of The One Big Beautiful Bill Act (Effective 2025-2026):</strong>  
   - Raises standard deduction amounts, making small, sporadic donations less tax-efficient and encouraging "charitable bunching"—combining several years’ donations into one tax year to exceed itemization thresholds and maximize deductions.
   - Introduces a new above-the-line deduction for non-itemizers up to $1,000 (single) or $2,000 (joint) for cash gifts to public charities, excluding DAFs.
   - Imposes a 0.5% AGI floor for deductible gifts, meaning only amounts over this threshold qualify.
   - Caps top earners' charitable deduction value at 35% of AGI (down from 37%), reducing tax benefits on large gifts.
   - Permanently sets cash donation deduction limit at 60% of AGI.

4. <strong>Charitable Strategies:</strong>  
   - <strong>Charitable Bunching:</strong> Enables donors to maximize itemized deductions by consolidating donations.  
   - <strong>Gifting Private Business Interests:</strong> Donating pre-sale business assets to a DAF can avoid capital gains taxes and yield immediate fair market value deductions.

5. <strong>Client Engagement:</strong>  
   Advisors should engage clients by understanding their charitable intent, timing gifts around high-income years or liquidity events, and discussing tax and estate planning. Key questions help identify clients who could benefit from a DAF.

The presentation emphasizes educating financial advisors on utilizing DAFs effectively under evolving tax laws to optimize clients' philanthropy and financial planning. William Robinson offers his contact information for further support.

Keywords

Donor-Advised Funds

DAFs

Charitable Giving

Financial Advisors

Tax Deduction

Private Foundations

One Big Beautiful Bill Act

Charitable Bunching

Gifting Private Business Interests

Client Engagement