Bunching Donations

BUNCHING CHARITABLE GIFTS using a Donor Advised Fund (DAF) remains a smart strategy, especially with new tax rules that took effect in 2026.

Bunching allows you to concentrate several years of charitable giving into one tax year, which may help you exceed the standard deduction and itemize charitable deductions, depending on your individual tax circumstances.

Starting in 2026, charitable deductions will only be available to an itemizer whose annual giving exceeds 0.5% of their Adjusted Gross Income (AGI). Additionally, a 35% cap on the value of itemized deductions will limit the tax benefit for high earners. These changes make strategic giving more important than ever.

Because the standard deduction is now much higher, many taxpayers no longer itemize annually. Bunching charitable gifts may allow you to itemize in the year you give, depending on your personal tax circumstances.

Instead of giving annually, you consolidate multiple years of charitable contributions into one year and contribute to a DAF. This allows you to exceed the AGI threshold and itemize deductions for that year. In subsequent years, you can take the standard deduction while continuing to support your favorite causes through your DAF.

Giving to a DAF in one large "bunch" increases your total deductions. When added to your other deductible expenses, you may end up with enough deductions to itemize for that year.

After contributing to your DAF, you may be able to take a pause from charitable giving in subsequent years and revert to claiming the federal standard deduction. Rather than giving directly to charities each year, you can recommend grants from your donor‑advised fund on an ongoing basis. By making a larger, “bunched” contribution to the fund in one tax year, you may increase your total itemized deductions for that year when combined with other deductible expenses, depending on your individual tax situation.

• By depositing multiple years’ worth of donations into a DAF, you can deduct the entire contribution in the year you make it, while maintaining the flexibility to make distributions from the fund in future years.
• You can continue to give annual contributions to the charities that mean the most to you, without interruption.
• Using a DAF, you can give to both Jewish causes, such as Jewish agencies or synagogues, and non-Jewish causes, such as arts organizations, secular social services or educational institutions.
• The Foundation continues to invest the money in your DAF, so the value may grow over time.
• DAFs make it easy to involve generations of your family in philanthropy. You can appoint your children as advisors or successors to the fund.

The new universal charitable deduction of up to $1,000 (individuals) or $2,000 (couples) for non-itemizers does not apply to DAF contributions. This makes bunching through a DAF even more valuable for donors who plan to itemize.