Year-End Charitable Giving Strategies
Making gifts to charitable organizations with highly appreciated stocks is one of the benefits of being a long-term Capital Counsel client. The charity receives the market value of your gift, and you do not realize gains on the transfer. Stock gifts from individual accounts to donor-advised funds (DAFs) receive the same tax benefit. DAFs separate the timing of charitable gifts for tax purposes from gifts to charities. DAFs have no minimum annual distribution requirements as do private foundations, so you can build a giving fund while you benefit most from the tax deduction for gifts to charities.
The One Big Beautiful Bill Act passed in July 2025 changes the rules for charitable deductions beginning in January 2026. The new rule excludes 0.5% of your adjusted gross income (AGI) from your charitable gift deduction. If your AGI is $500,000, for example, $2,500 of your 2026 charitable gifts would not be deductible. This tax change raises the value of making charitable gifts before the end of this year since they will be fully deductible. Opening and funding a DAF before year-end allows you to get the full tax benefits of your gift and can cover more than one year of charitable giving.
Capital Counsel offers managed DAFs through the American Endowment Foundation. They require initial funding of $25,000 with an ongoing balance of at least $10,000. We recommend appreciated stocks to fund your DAF and manage stock sales to raise cash for your charitable contributions. You create a list of recommended donations on the AEF web site, or we can create one for you if you wish. With a minimum contribution of $250, your DAF allows you to make smaller gifts than you can with direct gifts of stock. DAFs also simplify income tax preparation. You report the contributions you made to your DAF to the IRS. You no longer need to save receipt letters from the individual charities.
Please contact us by December 5, 2025
at info@capcounsel.com or 212-350-9333
if you would like to open and fund a DAF this year.
Contact Us
Capital Counsel LLC
527 Madison Avenue, 19th Floor
New York, NY 10022
212-350-9333
info@capcounsel.com
www.capitalcounsel.com
Disclosures
Past performance is not indicative of future results. Different types of investments involve varying degrees of risk. All information provided herein is for informational purposes only and should not be interpreted as an offer or provision of investment advice, a recommendation to buy or sell specific securities, or a substitute for personalized advice from Capital Counsel. Capital Counsel does not offer tax or legal advice; readers should not consider the contents of this newsletter as legal or tax advice and should consult their own legal and tax professionals. The information contained herein represents the views of Capital Counsel at a specific point in time, which are subject to change as market conditions, legal requirements, and information available to us evolves. Where market and index data are presented, they have been obtained from FactSet Research Systems, unless otherwise noted. Capital Counsel assumes no responsibility for the accuracy of this data. A full discussion of Capital Counsel’s advisory services and fees is available in our Form ADV Part 2 brochure, which is available upon request, or on our website here capitalcounsel.com/Form-ADV.