Strong stock market returns and changes to tax laws helped charitable giving grow in 2025. DAFgiving360, a major manager of donor-advised funds (DAFs), reported that donors gave an all-time high of £9.9 billion to charities. This is £2.2 billion, or 28%, more than in the previous year.
Donors can give cash or other assets to DAFs and get a tax deduction right away. They can then decide later how to donate to charities. DAFs make it easier for donors to give stocks or assets without paying capital gains tax. Until the DAF gives money to charities, the assets can increase in value. Julie Sunwoo, president of DAFgiving360, said that 74% of last year’s contributions were in non-cash assets, including stocks, real estate, and cryptocurrency.
Sunwoo noted that a key reason for the increase was President Donald Trump’s new tax law, which started in July. This law will change tax benefits for wealthy donors beginning in 2026. Many financial advisors urged clients to give more before these changes took effect. The law will likely lower annual charitable giving by £4.1 billion.
The law also limits tax benefits for itemizers, meaning many donors may give less in the future. Tax planner David Perez advised clients to fund their DAFs with enough money for the next few years before the tax changes. He believes these changes will make it harder for donors to give quickly, as using DAFs requires more effort than simply writing a cheque.
Vocabulary List:
- Charitable /ˈtʃærɪtəbl/ (adjective): Relating to the organization or distribution of help to those in need.
- Contributions /ˌkɒntrɪˈbjuːʃənz/ (noun): Amounts of money or goods given to a cause or organization.
- Deduction /dɪˈdʌkʃən/ (noun): An amount that can be subtracted from total income to reduce taxable income.
- Assets /ˈæsɛts/ (noun): Resources owned by an individual or organization valuable items or properties.
- Beneficiary /ˌbɛnɪˈfɪʃəri/ (noun): A person or group that receives benefits from something especially funds.
- Advisor /ədˈvaɪzər/ (noun): A person who provides expert advice professionally.
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