New tax rules are accelerating changes in philanthropy, outpacing the awareness of many wealth management firms and trust companies.
Public Law No. 119-21, commonly known as the One Big Beautiful Bill Act (OBBBA), introduces several changes that directly impact how and when clients give. As outlined in our whitepaper, Turning Tax Reform Into Client Strategy, key updates include:
Taxpayers taking the standard deduction can now claim up to $1,000 (single) or $2,000 (joint) in charitable cash contributions.
Itemized charitable deductions apply only to contributions above 0.5% of adjusted gross income (AGI).
The tax benefit of itemized deductions is capped at 35% for top-bracket taxpayers.
These changes make it more challenging to maximize the tax benefits of charitable giving, particularly for high-income clients. Strategies that were once straightforward may now require more thoughtful planning and timing.
For wealth management and trust professionals, this is more than a tax update. It is an opportunity to position philanthropy as an ongoing, strategic element of the client relationship.
Moving Beyond Year-End Giving
Traditionally, charitable planning was addressed only at year-end, but this approach is now less effective.
Clients are increasingly looking for a more intentional approach to giving that aligns with their values, involves their families, and fits into their broader financial plan. At the same time, the new tax rules make it important to plan ahead, rather than react late in the year. As a result, philanthropy is shifting from a transactional discussion to a strategic approach.
Shifting the timelines also creates a natural, recurring opportunity to engage clients in deeper conversations. Philanthropy offers an ongoing way to revisit priorities, refine goals, and connect wealth to purpose over time.
The Rise of Donor-Advised Funds
Against the backdrop of the OBBBA, donor-advised funds (DAFs) are becoming a valuable tool. An approach called “bunching” allows clients to accelerate multiple years of charitable contributions into a single year to exceed the 0.5% AGI threshold and maximize deductions.
Beyond tax efficiency, DAFs are transforming philanthropy by integrating it into the broader wealth management ecosystem. This supports ongoing engagement, enables more customized strategies, and makes it easier to involve multiple generations in giving decisions.
As we discussed in a recent Tech It Up podcast, Modern Philanthropy as a Strategic Advantage, technology is playing a key role in this shift. Digital platforms make charitable planning more accessible, collaborative, and continuous, fully integrating it into the modern wealth management experience.
Forward-looking companies are taking this a step further by embedding philanthropy directly into their service model, often through white-label DAF programs. This approach enables them to:
Align their brand with causes that resonate with their clients
Leverage technology to foster engagement across generations
Offer more flexibility in how charitable assets are invested and managed
Integrate tax planning into client conversations throughout the year
This creates a more cohesive client experience, where philanthropy is a core component of advisory services.
From Planning Tactic to Strategic Advantage
While tax reform has increased the complexity of charitable giving, it has also made it more strategic. Wealth managers and fiduciaries have an opportunity to move philanthropy from a planning exercise to a core part of the client experience, strengthening relationships, engaging families across generations, and delivering more meaningful, differentiated advice.
Download the full whitepaper, Turning Tax Reform Into Client Strategy, to read more about the bill's impact. Then, to learn how SS&C Black Diamond® Wealth Solutions can help you create, communicate, and implement effective client strategies during policy changes, request a personalized demo, call 1-800-727-0605, or email info@sscblackdiamond.com today.
