The donor-advised fund increases as tax cuts end and stocks rise

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide for the high-net-worth investor and consumer. subscription To receive future issues, directly to your inbox.

Strong stock market returns and tax reform have given a boost to charitable giving in 2025, according to DAFgiving360, one of the largest donor-advised fund managers.

The organization said its donors gave a record $9.9 billion to charities in 2025, an increase of $2.2 billion, or 28%, from the previous year.

Donors can contribute cash or assets to donor-advised funds, or DAFs, and receive an immediate tax deduction before they decide how to distribute their gift to charities. For donors who want to unload appreciated assets without paying capital gains tax, it is much easier to give stocks or other non-cash assets to a DAF than to give them directly to a nonprofit. Until the donor-advised fund makes grants to charities, assets continue to rise.

Julie Sunwoo, president of DAFgiving360, told CNBC that 74% of contributions last year came in the form of non-cash assets, including ETFs, index funds, real estate and cryptocurrencies.

“If you have things like appreciated assets or things that are difficult to monetize, DAFs really excel at helping people do that, put it in a portfolio, and then develop a real plan on how they want to turn it into a charity and take their time,” she said.

Sunwoo attributed much of the increase to the passage of President Donald Trump’s “Big Beautiful Bill” law in July, which cuts many tax benefits for high-income donors starting in 2026.

Many lawyers and tax advisors for the wealthy advised clients last year to increase their charitable giving in order to take advantage of expiring tax benefits. For the highest earners, the effective tax benefit of charitable giving was reduced from 37% to 35%. Indiana University’s Lilly Family School of Philanthropy estimated last year that this cap alone would reduce giving by $4.1 billion to about $6.1 billion annually.

Additionally, the bill established tax incentives for designers, who would only be able to deduct donations in excess of 0.5% of their adjusted gross income. For example, a taxpayer with income of $2 million would get no tax benefit for the first $10,000 of his or her annual giving, according to tax planner David Perez.

Perez said he advised clients to fund their DAFs with contributions 3 to 5 years before the tax changes take effect. Once the DAF is loaded, they can still spread their donations to the charity over several years.

He said he expects tax code changes will continue to shift donors away from checkbook philanthropy. For example, DAFs cannot be used to purchase tickets to charity galas or events, which would be partially deductible if taxpayers purchased them directly from a charity, according to Perez. Although a DAF is easy to set up, recommending a grant from your DAF takes more time and effort than writing a check, he said.

“If they really want to do it the right way, that is, through their donor-advised fund, they now have to go through that entity or vehicle to contribute,” he said. “They’ll start thinking: Do I want to go to the trouble of doing this?”