With the 2026 standard deduction at $16,100 for single filers and $32,200 for married couples filing jointly, a lot of people who give to charity every year never actually get a tax benefit for it — their itemized deductions, including their giving, don’t clear the standard deduction anyway. Two strategies fix that: bunching your donations into fewer, larger years, and routing them through a donor-advised fund.
The New 0.5% AGI Floor Under OBBBA (2026)
Starting in 2026, there’s a new wrinkle on top of the standard-deduction problem: charitable contributions are only deductible above a floor equal to 0.5% of your adjusted gross income. On $100,000 of AGI, the first $500 you give in a year doesn’t count toward your deduction at all — only the amount above that floor does. The floor applies every year you itemize, so a donor giving the same amount every year loses a little deductibility to it annually.
Bunching: Front-Loading Multiple Years of Giving
Bunching means compressing several years of planned giving into a single tax year instead of spreading it out evenly. If you’d normally give $10,000 a year, giving $30,000 or $50,000 in one year (and nothing, or very little, in the years around it) does two things: it makes it far more likely you clear the standard deduction and can itemize that year, and it means the new 0.5%-of-AGI floor only bites once instead of every single year.
Why a Donor-Advised Fund Is the Vehicle
The problem with bunching is that most charities want steady annual support, not one giant check every three to five years. A donor-advised fund (DAF) — offered by sponsors like Fidelity Charitable, Schwab Charitable, and Vanguard Charitable — solves that: you contribute the lump sum to the fund in the bunching year and take the full deduction then, but the money doesn’t have to leave the fund all at once. You (or your advisor) recommend grants out to specific charities over the following years, on whatever schedule you’d normally give, while the deduction was already locked in when you funded the account.
Appreciated Stock vs. Cash Gifts
What you contribute to a DAF matters as much as when. Cash gifts are deductible up to 60% of your AGI; gifts of appreciated securities held longer than a year are capped at 30% of AGI, but they come with a second benefit cash doesn’t: donating stock directly avoids the capital gains tax you’d owe if you sold it first (see our guide to long-term capital gains brackets for what that tax would otherwise cost you), and you still deduct the full fair market value.
Who Should Consider This
Bunching through a DAF makes the most sense for people whose regular annual giving sits close to, or below, the standard deduction threshold, and for anyone holding appreciated stock they were planning to donate anyway. If your itemized deductions already clear the standard deduction by a wide margin every year regardless of giving, the timing benefit is smaller — though the ability to donate stock and dodge the capital gains tax still applies either way.
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