Why Opening and Funding a Donor-Advised Fund Before 12/31/25 Matters
Tax Consulting & Preparation
Why Opening and Funding a Donor-Advised Fund Before 12/31/25 Matters
November 2025
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November 2025
As 2026 approaches, one thing is becoming clear: charitable giving is about to get more complicated. The Opportunity for Better Budgeting and Balanced Accountability Act (OBBBA) ushers in a series of tax-related shifts beginning January 1, 2026.
While Congress intends these changes to create uniformity and reduce loopholes, the reality is many taxpayers will lose access to several tax advantages they’ve enjoyed for nearly a decade. For individuals who give to charity or plan to support causes over time, 2025 is a strategic year.
One of the potentially most effective moves you may want to make before the calendar hits December 31, 2025, is to establish and fund a Donor-Advised Fund (DAF).
Here is why this matters, what a DAF does, and how you can position yourself ahead of these changes while there’s still time.
What’s Changing in 2026 Under OBBBA?
While the full set of changes is complex, here are the three most important shifts affecting everyday taxpayers and philanthropic families:
The higher standard deduction sunsets. Since 2018, most Americans haven’t itemized their deductions because the standard deduction was so high. In 2026, it drops back to pre-2018 levels. When itemizing becomes more attractive, charitable deductions become potentially more valuable. But the rules around when and how you can deduct contributions are also tightening.
Certain charitable deduction strategies become more restrictive. OBBBA narrows the ability to “bunch” large deductions in a single tax year without clearer substantiation and timing.
Higher-income households face new phase-outs. Several deductions — including charitable ones—will be subject to reintroduced income limits.
Why a Donor-Advised Fund Is the Smartest Move Before the Deadline
A Donor-Advised Fund (DAF) is essentially a low-cost, highly flexible charitable account. You make contributions now, take the deduction in the year of the gift, and recommend grants to nonprofits later—on your schedule.
Funding a DAF in 2025 is powerful because it lets you lock in today’s rules before the 2026 reset.
Key Benefits of Opening and Funding a DAF by 12/31/25
You secure a deduction under the 2025 rules. Even if you plan to give to nonprofits gradually over future years, the deduction is taken upfront—before OBBBA’s limitations kick in.
You can “bunch” several years of giving in a way that may not be allowed, or may be capped, after 2025. This means you may be able to contribute (as an example) five years’ worth of charitable giving into a DAF in 2025, claim the full deduction now, and distribute gifts at your usual pace.
You maximize tax efficiency in what may be one of the last high-deduction years for a while. You retain total flexibility.
Once funded, your DAF:
can be invested for potential growth,
allows you to give over months or decades,
can involve children, grandchildren, or successors,
avoids the administrative burden of private foundations.
Who Benefits Most?
Anyone can use a DAF, but OBBBA’s upcoming changes may especially impact:
High-income households Facing reintroduced deduction phase-outs in 2026.
People with major income events in 2025 (large bonuses, business sale, real estate sale, exercised stock options, etc.)
Philanthropic families who want a structured, long-term giving plan
Individuals who already support multiple charities annually A DAF simplifies the entire process while locking in 2025 tax benefits.
What You Can Do Right Now
Here’s the practical, no-nonsense checklist:
Decide whether you want to itemize in 2025.
If yes, a DAF can amplify your deduction.
Estimate the charitable amount you want to pre-fund.
Think: one year, three years, or even longer.
Contribute appreciated stock, real estate, or other assets.
This lets you avoid capital gains and take the deduction at fair market value.
Open the account well before December 31.
You don’t want to be scrambling at year-end.
Grant on your own timeline.
Give immediately or spread giving across multiple years—your choice.
Bottom Line
OBBBA isn’t about discouraging generosity — it’s about tightening the rules. But for taxpayers, families, and philanthropists, the message is simple: 2025 is a decisive year.
By opening and funding a Donor-Advised Fund before December 31, 2025, you lock in today’s more favorable deduction rules while building a flexible, long-term giving platform for the causes you care about.
It’s the rare combination of doing good and doing something potentially financially smart—before the window narrows.
Lido Advisors, LLC is an SEC-registered investment adviser. Please note that SEC registration does not denote any particular competence or ability and no inference to the contrary should be made. For complete information on the services we provide and our fees, please review our Form ADV at adviserinfo.sec.gov, call (310) 278-8232, or mail us at 1875 Century Park East Suite 950, Los Angeles, CA 90067.
Past performance is not indicative of future performance. The information in this report is for informational purposes only and should not be relied upon as the basis of an investment or liquidation decision. Nothing in this report shall be construed to be a solicitation to buy or offer to sell any security, product or service to any non-U.S. investor, nor shall any such security, product or service be solicited, offered or sold in any jurisdiction where such activity would be contrary to the securities laws or other local laws and regulations or would subject Lido to any registration requirement within such jurisdiction. Certain information contained in these materials has been obtained from published and non-published sources prepared by third parties, which, in certain cases, have not been updated through the date hereof. While such information is believed to be reliable, Lido has not independently verified such information nor does it assume any responsibility for the accuracy or completeness of such information. Except as otherwise indicated herein, the information, opinions and estimates provided in this presentation are based on matters and information as they exist as of the date these materials have been prepared and not as of any future date, and will not be updated or otherwise revised to reflect information that is subsequently discovered or available, or for changes in circumstances occurring after the date hereof. Lido’s opinions and estimates constitute the Lido’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only.
Not all investments are suitable for all clients. It should not be assumed that any security listed or any recommendations made in the future will be profitable or without loss, including risk of loss of principal, or will equal any prior performance. All investments involve the risk of potential investment losses including the potential risk of loss of principal as well as the potential for investment gain. Further, the prior yield figures indicated herein represent performance for only a short time period and may not be indicative of the yield or volatility each security will generate over a long time period. The yield should also be viewed in the context of the broad market and general economic conditions prevailing during the periods covered by the performance information. Any references to future returns/risk are not promises of the actual return the client portfolio may achieve. Before investing, investors should seek financial advice regarding the appropriateness of investing in any securities of investment strategies discussed. Not all investments are suitable for all investors.
Certain information contained in this document constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue,” “believe,” the negatives thereof, other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of the Fund may differ materially from those reflected or contemplated in such forward-looking statements.
Lido does not provide legal or tax advice or trustee services. Lido’s affiliates, including, but not limited to, Lido Tax, LLC (“LTax”), Enterprise Trust & Investment Company, Enterprise Trust Company (“Enterprise Trust”) and affiliated third-party legal professionals will, upon request, provide formal legal, tax, and/or trustee services for Lido’s client under separate agreement. Prospects and clients are urged to seek the advice of their own independent counsel or tax professional should such services be required. Bill pay and bookkeeping services offered upon request through L-Pay, a division of Enterprise Trust. Referrals to our affiliated providers available.
Lido specifically disclaims any and all liability arising from the information or illustrations presented in these materials and is not responsible for the consequences of any decisions or actions taken as a result.
Lido Advisors, LLC is an SEC-registered investment adviser. Please note that SEC registration does not denote any particular competence or ability and no inference to the contrary should be made. For complete information on the services we provide and our fees, please review our Form ADV at adviserinfo.sec.gov, call (310) 278-8232, or mail us at 1875 Century Park East Suite 950, Los Angeles, CA 90067.
Past performance is not indicative of future performance. The information in this report is for informational purposes only and should not be relied upon as the basis of an investment or liquidation decision. Nothing in this report shall be construed to be a solicitation to buy or offer to sell any security, product or service to any non-U.S. investor, nor shall any such security, product or service be solicited, offered or sold in any jurisdiction where such activity would be contrary to the securities laws or other local laws and regulations or would subject Lido to any registration requirement within such jurisdiction. Certain information contained in these materials has been obtained from published and non-published sources prepared by third parties, which, in certain cases, have not been updated through the date hereof. While such information is believed to be reliable, Lido has not independently verified such information nor does it assume any responsibility for the accuracy or completeness of such information. Except as otherwise indicated herein, the information, opinions and estimates provided in this presentation are based on matters and information as they exist as of the date these materials have been prepared and not as of any future date, and will not be updated or otherwise revised to reflect information that is subsequently discovered or available, or for changes in circumstances occurring after the date hereof. Lido’s opinions and estimates constitute the Lido’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only.
Not all investments are suitable for all clients. It should not be assumed that any security listed or any recommendations made in the future will be profitable or without loss, including risk of loss of principal, or will equal any prior performance. All investments involve the risk of potential investment losses including the potential risk of loss of principal as well as the potential for investment gain. Further, the prior yield figures indicated herein represent performance for only a short time period and may not be indicative of the yield or volatility each security will generate over a long time period. The yield should also be viewed in the context of the broad market and general economic conditions prevailing during the periods covered by the performance information. Any references to future returns/risk are not promises of the actual return the client portfolio may achieve. Before investing, investors should seek financial advice regarding the appropriateness of investing in any securities of investment strategies discussed. Not all investments are suitable for all investors.
Certain information contained in this document constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue,” “believe,” the negatives thereof, other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of the Fund may differ materially from those reflected or contemplated in such forward-looking statements.
Lido does not provide legal or tax advice or trustee services. Lido’s affiliates, including, but not limited to, Lido Tax, LLC (“LTax”), Enterprise Trust & Investment Company, Enterprise Trust Company (“Enterprise Trust”) and affiliated third-party legal professionals will, upon request, provide formal legal, tax, and/or trustee services for Lido’s client under separate agreement. Prospects and clients are urged to seek the advice of their own independent counsel or tax professional should such services be required. Bill pay and bookkeeping services offered upon request through L-Pay, a division of Enterprise Trust. Referrals to our affiliated providers available.
Lido specifically disclaims any and all liability arising from the information or illustrations presented in these materials and is not responsible for the consequences of any decisions or actions taken as a result.
