Early Birds and Bunching

Planning for year-end giving and tax benefits

When “back to school” enters your vocabulary, you know the rest of the year will go by in a flash! That’s why it’s important to check in on your charitable goals for 2026 before fall gets into full swing. Otherwise, you may find yourself scrambling to synchronize tax planning, financial planning, and gifts to favorite nonprofits.

In particular, a technique called “bunching” is important to consider as you get a jump on your year-end charitable giving plans.

Even just a few years ago, not many people had heard of “bunching.” It became widely discussed when the Tax Cuts and Jobs Act of 2017 substantially increased the standard deduction for calculating income tax. According to important historical data, this change caused many taxpayers who previously itemized deductions to begin claiming the standard deduction.

Since the beginning of 2026, charitable planning has become even more nuanced. The One Big Beautiful Bill Act added new limitations. Although in many cases charitable giving remains highly tax-efficient, these changes make proactive planning increasingly important.

As “bunching” charitable gifts may be useful to you, we encourage you to discuss with your tax and financial advisors as soon as you can.

Rather than making similar-sized donations every year, you can combine two or more years of gifts up front into a single tax year to qualify for itemizing. You could potentially achieve a greater tax benefit than you would by making smaller annual gifts and taking the standard deduction. 

A donor-advised fund (DAF) at the Idaho Community Foundation (ICF) makes bunching especially attractive. For example, you can contribute several years' worth of charitable gifts to your DAF this year, generally be eligible to claim an income tax deduction for the current year (subject to applicable limitations) and then recommend grants to your favorite nonprofits over several future years. This allows your favorite organizations to continue receiving steady support while simultaneously maximizing your own tax benefits.  

Remember, too, that your ICF fund accepts appreciated securities, which may provide additional tax advantages in the right circumstances. That’s because you may be able to avoid capital gains tax on the highly appreciated stock you contribute to your DAF.

The takeaway here is that now is the time to begin conversations with your tax and financial advisors about bunching and about your charitable plans in general. And please loop in the ICF team. We are honored to serve as a sounding board as you carry out your charitable wishes. ICF is your home for charitable giving, and we always welcome a conversation! 

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