New Floor, New Opportunity: Consider a DAF “Bunching” Strategy

For many generous donors, charitable giving is a year-round commitment. But as the end of the year approaches, it’s also a good time to think strategically about how and when you make your gifts.

Recent tax law changes have created new considerations for charitable deductions starting in 2026. As a result, some donors may find that making their usual annual gifts doesn’t provide the same tax benefit it once did.

Fortunately, there is a simple strategy that allows you to continue supporting the nonprofits you care about while potentially maximizing your charitable deduction: “bunching” multiple years of giving into a donor-advised fund.

What Is “Bunching”?

Bunching means combining several years’ worth of charitable contributions into a single gift made in one tax year.

Rather than making donations directly to charities year after year, you make a larger contribution to a donor-advised fund (DAF) today and receive the charitable deduction in the year of that gift. Then, you recommend grants from the fund to your favorite nonprofits over time, maintaining your regular pattern of support.

The charities you care about continue receiving the same annual gifts. The difference is that you’ve made those charitable dollars work harder for you from a tax-planning perspective.

Why Consider This Strategy?

Beginning in 2026, only charitable contributions exceeding 0.5% of adjusted gross income (AGI) may qualify for an itemized charitable deduction.

For some donors, that means annual giving alone may not exceed the new threshold. By combining multiple years of planned charitable gifts into a single contribution to a donor-advised fund, you may be able to surpass that threshold and qualify for a larger charitable deduction in the year you make the gift.

In future years, you can continue supporting the organizations you love through grants from your donor-advised fund, even if you don’t make additional contributions to the fund.

Keep Your Giving Consistent

One of the biggest advantages of a donor-advised fund is that your charitable planning doesn’t have to dictate your charitable impact.

You can continue making annual gifts to your favorite causes, houses of worship, schools, cultural organizations, or community nonprofits. The organizations receive support when they need it, and you gain the flexibility to separate the timing of your charitable deduction from the timing of your grants.

For many donors, that’s a powerful combination of generosity, convenience, and thoughtful planning.

A Donor-Advised Fund Offers More Than Tax Benefits

While tax efficiency may be what starts the conversation, many donors discover additional benefits along the way. A donor-advised fund can help you:

Organize your charitable giving in one place
Support multiple nonprofits from a single charitable account
Involve family members in philanthropic decisions
Create a more intentional long-term giving plan
Build a charitable legacy that reflects your values

Most importantly, it provides a flexible way to support the causes and organizations that matter most to you.

Start Planning Before Year-End

If you’re considering significant charitable gifts in the coming years, now may be an ideal time to explore whether a donor-advised fund could fit into your giving strategy.

The Community Foundation for Greater Atlanta can help you evaluate your options, understand how charitable funds work, and develop an approach that aligns with both your philanthropic goals and your financial plans.