News for Professional Advisors

For many attorneys, CPAs and financial advisors, fall is an ideal time to revisit charitable giving strategies that could help clients achieve their 2026 planning objectives.

A popular strategy that deserves special attention in year-end planning is “bunching” charitable contributions. 

The bunching concept became widely discussed when the Tax Cuts and Jobs Act of 2017 substantially increased the standard deduction for calculating income tax. This change caused many taxpayers who previously itemized deductions to begin claiming the standard deduction instead because their annual charitable gifts and other deductible expenses were no longer sufficient to exceed the standard deduction threshold.

Since the beginning of 2026, charitable planning has become even more nuanced. The One Big Beautiful Bill Act added a limitation under Internal Revenue Code Section 170, requiring that itemized charitable deductions must generally exceed 0.5% of adjusted gross income before a deduction is available. In addition, Section 68 now effectively limits the tax benefit of itemized deductions for taxpayers in the highest marginal income tax bracket to 35%. 

These two new provisions are sometimes called the “floor” and the “cap.” Although in many cases charitable giving remains highly tax-efficient, these changes make proactive planning increasingly important.

What is ‘bunching?’

Rather than making charitable gifts in roughly equal amounts each year, a client may benefit from consolidating two or more years of planned charitable contributions up front into a single tax year. 

By concentrating, or “bunching,” donations into one year, the client may be better positioned to itemize deductions in that year while claiming the standard deduction in subsequent years, potentially producing greater cumulative tax savings over time.

Using Donor Advised Funds

For many of your clients, a Donor Advised Fund at the Community Foundation serves as an effective vehicle for implementing a bunching strategy. A client can make a single, larger contribution to the Donor Advised Fund, generally claim the charitable deduction in the year of the contribution under Internal Revenue Code Section 170(a), and then recommend grants to favorite charities now and in future years. 

The timing of the income tax deduction is separated from the timing of charitable distributions, allowing the client’s favorite nonprofits to continue receiving consistent annual support.

Year-end considerations

As year-end approaches, many clients will naturally ask whether they should “bunch,” or accelerate, charitable gifts before Dec. 31. 

Advisors who raise the bunching conversation now - and coordinate early with the Community Foundation team - can help clients evaluate whether this strategy aligns with both their philanthropic objectives and their broader financial plans.

The Community Foundation is honored to work alongside you and other advisors all year long to help structure charitable gifts in a way that advances your clients’ philanthropic goals while making the planning process as seamless as possible.