American charities pulled in $617.2 billion in 2025, breaking the $600 billion threshold for the first time in current dollars, according to the just-released Giving USA 2026: The Annual Report on Philanthropy for the year 2025, produced by the Indiana University Lilly Family School of Philanthropy. On an inflation-adjusted basis, that works out to roughly 3% growth over the previous year, a number that looks modest until you consider the backdrop it emerged from: a year of federal funding cuts, volatile markets, and shifting political winds.
What the headline figure does not immediately reveal is the role that tax strategy played in lifting it. The One Big Beautiful Bill Act, signed into law on July 4, 2025, introduced a series of changes to how charitable donations can be deducted, with most of the tighter provisions taking effect in 2026. The window this created was not subtle. Analysts at the Tax Foundation noted that some taxpayers may have adapted their giving strategy to maximize tax benefits by frontloading donations into 2025, specifically to avoid the new floor on charitable deductions and the limitation on overall itemized deductions that both begin in 2026. Giving USA’s own analysis confirms there is evidence that some donors and corporations timed or bunched their giving to lock in more favorable rules before they expired, particularly through donor-advised funds and similar vehicles.
The mechanics are worth understanding. Beginning in 2026, itemizing taxpayers face a new 0.5% floor on charitable deductions, meaning only the portion of donations that exceeds 0.5% of adjusted gross income becomes deductible, and top-bracket donors see the value of their deduction capped at 35 cents per dollar instead of 37 cents. For a major donor, front-loading a significant gift into 2025 before those restrictions kicked in was simply sound financial planning. Donor-advised funds became the vehicle of choice, allowing contributors to claim the deduction immediately while retaining the ability to direct grants to charities over future years.
That said, tax timing does not fully explain a $617 billion year. The stock market played an equally important role. Jon Bergdoll, interim director of data and research partnerships at the Indiana University Lilly Family School of Philanthropy, pointed to the S&P 500 and broader financial market performance as a direct contributor to growth in donor wealth, foundation assets, and ultimately giving levels. Several organizations reported that their fundraising success was closely tied to the size of gifts, and the size of gifts was closely tied to how markets performed. Bergdoll noted this growing dependency creates a new kind of risk: as markets become a larger predictor of giving, their volatility will increasingly translate into volatility in charitable receipts.
Looking at where the money went reveals an uneven picture. Education was one of the stronger performers, reaching an all-time high even in inflation-adjusted terms, while the human services sector has also grown substantially over the past four decades, rising from roughly 5% to 15% of all charitable giving. Environment and animal causes were up 8.2%, and public-society benefit organizations gained 8.7%. Religious organizations were the one exception to the general trend, edging slightly lower in real terms.
Bequests deserve their own discussion. Bequest giving grew nearly 20% in current dollars, reaching $62.19 billion and representing its third double-digit increase in four years, pushing its share of total giving to 10%, above the historical range of 7% to 9%. This is the category most directly connected to the long-predicted Great Wealth Transfer, the expected movement of trillions of dollars in baby boomer wealth to the next generation and to charitable causes. Researchers are cautious about declaring it officially underway, noting that estate reporting lags make the data hard to interpret definitively. But the directional signal is consistent enough that many nonprofits are already expanding their planned giving programs.
Foundation giving also grew, reaching a new high of $117.15 billion, though the 18% nominal drop from the prior year’s near-record looks steep in isolation until you account for the fact that 2024 had been an exceptionally strong year for foundation contributions. Corporate giving grew by just 0.5% in real terms, the weakest performance across all donor categories, with some companies pulling back in response to economic pressures.
The 2025 numbers carry a caveat that may matter more than the record total itself. If a portion of last year’s giving was borrowed from future years through tax-motivated front-loading, nonprofit finance officers planning 2026 budgets would be wise to factor that in. The National Council of Nonprofits estimates the new universal charitable deduction could generate roughly $74 billion over ten years, while the disincentives embedded in the same legislation could reduce giving by $81 billion over the same period. The record year and the headwinds ahead are not mutually exclusive. Both are real.
