The final months of 2025 may prove to be among the most consequential charitable planning windows in recent memory. With the One Big Beautiful Bill Act (OBBBA) taking effect in 2026, the rules governing charitable deductions are about to change in ways that will alter tax-smart strategies for many clients. Beginning next year, only contributions that exceed 0.5% of a taxpayer’s adjusted gross income (AGI) will be deductible, and the overall value of itemized deductions will be capped at 35% of AGI, even for clients in the top tax bracket.
For high net worth families who have long relied on maximizing deductions, this creates a considerable incentive to accelerate giving before year-end. Donor-advised funds (DAFs), in particular, offer a timely way to lock in today’s more favorable provisions while preserving flexibility for future grantmaking.
The Role Of Donor-Advised Funds
Long known for their tax efficiency, DAFs now represent an effective way to front-load charitable contributions before the OBBBA rules take hold. By contributing assets before Dec. 31, clients have the opportunity to lock in today’s more favorable deduction structure, then spread out the actual disbursements to charities over years to come. For advisors, therefore, DAFs provide a natural opportunity to strengthen client relationships by offering practical solutions that align charitable intent with tax efficiency.
Beyond Tax Strategy
To treat DAFs primarily as a tax play, however, is to miss their larger potential. What makes them especially powerful is the potential to build a unified giving and investing strategy that is personalized for the client. Too often, clients see these activities as separate tracks: On the one hand, they invest in a set of companies. On the other, they donate to causes they care about and divest from holdings they find objectionable.
To treat DAFs primarily as a tax play, however, is to miss their larger potential.
The result can be a patchwork of actions that, at best, only partially align with their values. DAFs offer a way to integrate these strands into a more coherent approach that balances tax advantages with enduring impact.
An Exit Ramp For Misaligned Assets
One practical use case for a DAF is as an exit ramp for assets that no longer fit a client’s plans or priorities. For example, long-held positions in a concentrated stock or legacy shares in a family business can create both emotional and financial friction. Selling outright may trigger significant capital gains or disrupt family dynamics.
Contributing those holdings to a DAF provides a cleaner path forward: The donor can secure an immediate deduction, avoid realizing taxable gains and convert those assets into charitable capital. In this way, DAFs can help advisors turn complex portfolio clean-up into a constructive step in a client’s broader giving journey.
An Entry Point For Impact
Just as DAFs provide a solution for unwanted assets, they can also open doors to new opportunities. The most recent data from the National Philanthropic Trust shows that more than $250 billion is already committed to donor-advised funds. Advisors have an opportunity to guide how this money is put to work — helping clients to invest DAF capital in line with their values and give in ways that reflect their priorities, while also deepening relationships and building trust.
By connecting DAF activity back to the broader portfolio, advisors can design multi-asset strategies that align both investing and philanthropy. The inherent flexibility of DAFs also makes it possible to explore innovative approaches such as recoverable grants or program-related investments, all while maintaining tax efficiency. With the addition of robust reporting and storytelling tools, clients can see not only where their capital went, but how it advanced the causes they care about — strengthening their connection to both their wealth and their legacy.
Avoiding Misalignment
Without this level of integration, gaps can quickly emerge. For example, a family may find themselves donating generously to an animal shelter while simultaneously holding equity in companies that conduct cosmetic testing on animals. Another client might support lung cancer research while inadvertently profiting from tobacco sales.
Contradictions can arise when charitable strategy and investment strategy are treated as separate conversations.
These contradictions can arise when charitable strategy and investment strategy are treated as separate conversations. By making DAF planning a part of the broader portfolio discussion, advisors can help clients avoid conflicts and strive to ensure that every dollar deployed — whether for growth or for giving — supports a consistent set of values.
A Personalized Approach To Client Impact
The real power of DAFs lies in how adaptable they are to individual circumstances. For some clients, they are primarily a tax-efficient way to accelerate deductions. For others, they are a vehicle for removing unwanted holdings or exploring new approaches to impact. And for many, they become a means of carrying their philanthropic intent over to the next generation. Whatever the focus, DAFs give advisors a versatile tool to connect planning to what matters most to the client.
That personalization is what sets thoughtful advisors apart. By listening carefully and aligning strategies with each client’s mix of values, goals and financial realities, advisors can demonstrate that they are attuned not merely to market conditions or tax law, but to the person behind the portfolio. As 2025 draws to a close, the urgency created by OBBBA is real — but the broader opportunity is to use DAFs to deepen relationships, tailor solutions and help clients see their wealth as a reflection of their priorities.
Alex Laipple is Chief Growth Officer at Ethic, a technology-based asset management platform that provides personalized, values-aligned and tax-aware investing.
