For many advisors, the end of summer marks the beginning of year-end planning season. As clients return from vacation and turn their attention to tax and financial planning, it’s an ideal time to revisit charitable giving strategies that can help them meet both their philanthropic and financial objectives before December 31.
Recent changes under the One Big Beautiful Bill Act have added new limitations on itemized charitable deductions—including the introduction of a 0.5% adjusted gross income threshold for charitable deductions and a cap 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 “ceiling.”
Although in many cases charitable giving remains highly tax-efficient, these changes make proactive planning increasingly important.
1. Consider Whether “Bunching” Makes Sense
One strategy that continues to be effective for some taxpayers is “bunching.”
So, what is “bunching”? And why is it so useful under current tax law? Here’s how it works:
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 able to itemize deductions in one year while claiming the standard deduction in subsequent years, potentially producing greater cumulative tax savings over time.
A donor-advised fund at DuPage Foundation serves as an effective tool for implementing a bunching strategy. Clients can make one larger contribution to the donor-advised fund, claim the charitable deduction in the year of the contribution (subject to applicable IRS rules), and then recommend grants to their favorite charities over time. In short, 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.
As year-end approaches, many clients will naturally ask whether they should “bunch,” or accelerate, charitable gifts before December 31. Advisors who raise the bunching conversation now—and coordinate early with the Foundation’s team—can help clients evaluate whether this strategy aligns with both their philanthropic objectives and their broader financial plans and then implement the strategy without rushing through it.
2. Look Beyond Cash Gifts
When clients are planning charitable contributions, it’s also worth revisiting what they give—not just when they give.
For many clients, contributing long-term, appreciated, publicly-traded securities, instead of cash, may produce a more favorable tax result. Under current tax law, a client who contributes long-term appreciated, publicly-traded securities to a public charity, including a donor-advised or other type of fund at DuPage Foundation, generally may deduct the fair market value of the property (subject to the applicable AGI limitations) while avoiding recognition of the built-in capital gain that otherwise would result from a sale.
For clients who already intend to make charitable gifts, donating appreciated securities is often significantly more tax-efficient than writing a check.
3. Don’t Overlook IRA Qualified Charitable Distributions (QCDs)
Qualified Charitable Distributions continue to be an important planning opportunity for clients age 70½ or older to give directly to charity tax-free.
In 2026, eligible IRA owners may distribute up to $111,000 directly from an IRA to qualified charities (applicable to each spouse for a married couple filing jointly). Because QCDs are excluded from taxable income, they can reduce a client’s adjusted gross income, and in some cases, reduce taxes on Social Security benefits and Medicare premium surcharges.
For a subset of your clients, QCDs may be especially helpful in light of the charitable deduction limitations under the One Big Beautiful Bill Act.
Starting Early with Your Partners at DuPage Foundation
DuPage 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. Reach out anytime to get a jump on year-end planning!
This content is provided for informational purposes only. DuPage Foundation does not provide legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.
