The first half of 2025 was marked by significant market uncertainty, creating concern for even the most level-headed investors and donors.
Most charitable giving and investment strategies account for natural market cycles, but hyper market fluctuations in recent months have created additional ambiguity that can be hard to plan for — and even harder to ignore.
The reality is the need for strategic charitable giving is often even greater during periods of market fluctuations or a downturn.
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Nonprofits face many of the same uncertainties as investors and donors.
With the recent passage of the One Big Beautiful Bill Act, more dynamics could be tacked on to giving decisions in the year ahead.
In many sectors, the challenges are multifold: Nonprofits are grappling with the possible loss of funding streams as well as a potential dip in charitable giving.
At the same time, many charitable causes are seeing an increased need for their work.
Fortunately, with the right approach, investors and charitably minded individuals can maintain — and often enhance — their giving and impact during turbulent markets.
Here’s a closer look at some strategies to consider.
1. Choose the right giving strategy
It might seem simple, but creating a budget or plan and sticking to it has proven to be a tried-and-true strategy to withstand shifting market dynamics.
There is significant power and value in budgeting, especially as it pertains to charitable giving. To be successful, investors must be clear on:
- What causes they want to support
- How they’re going to fund grants
- Crafting an investment strategy that fits
For many donors, a donor-advised fund (DAF) is the ultimate philanthropic planning and budgeting vehicle. When it comes to charitable giving in times of uncertainty, DAFs offer several advantages that can help donors maintain their impact.
Most notably, a DAF separates the initial charitable contribution from the grant to the nonprofit. This means donors can budget and make a plan to increase contributions during periods of strong performance and maintain grantmaking should the market turn.
This consistency is vital in ensuring nonprofits benefit from regular, recurring contributions and offers donors the flexibility to adjust their giving to respond to specific needs.
2. Take a broad portfolio view
Turbulent markets will impact a portion of most investors’ and donors’ assets, making it a good time to review the full portfolio and make strategic investment and giving decisions that run counter to or can withstand fluctuations in the stock market.
For example, is now the right time to consider donating complex, illiquid assets, such as a hedge fund interest, private equity or a real estate holding to charity? Should you ensure charitable assets are invested in both public and private options, such as Vanguard’s Hamilton Lane Private Asset Fund? (Note: I am the CFO of Vanguard Charitable.)
3. Prioritize unrestricted giving
The message from nonprofits is clear: They prefer having control of how to allocate the assets that are granted to them.
In the last decade, there has been a marked shift in donor mindsets around the “overhead myth.” Today, donors are more likely to give money without restrictions, placing greater trust in the experts at the nonprofits they support to utilize donations and assets to their greatest potential and carry out their mission.
Unrestricted giving is becoming more common across charitable efforts, but it’s especially crucial as a part of unexpected giving.
During periods of uncertainty, the need for unrestricted giving can be even greater, as charities might face unique or unexpected challenges and costs.
The silver lining for nonprofits is that donors with money already earmarked for charity are more likely to step up and meet these moments.
According to Vanguard Charitable research, donors who use a Vanguard Charitable DAF for unexpected granting gave 39% more than those who use a DAF only for expected, ongoing giving, resulting in nearly 48% of total grants issued in 2024 being unrestricted.
4. Consider recoverable grants
A recoverable grant is another giving approach that could be utilized in periods of uncertainty.
The gift can be structured similarly to a bridge loan, in which a nonprofit could use a contribution to maintain cash flow and cover expenses while other funding might be in limbo.
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If that funding is secured, the grant could be repaid to the donor’s account, or it could be repurposed into other activities, depending on the specific situation and the donor’s preferences.
5. Stay the course
As is often the case with investing and financial management, one of the best things to do during market unpredictability is to trust your strategy.
All good charitable giving plans and investment strategies account for such conditions and are designed to weather downturns.
It might be worth a quick review of that plan to ensure the strategy and allocations are still aligned with long-term goals, but drastic changes are rarely necessary — nor effective.
Research has consistently shown that attempts to time the market often backfire.
Taking stock in the strategy work done to date and relying on the right plan and partner is often the best course in times of uncertainty.