Why ‘Bunching’ with Donor Advised Funds Still Wins in the Post-OBBBA Tax Landscape – and the Time to Give is Now

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By Nicolette Rea, JD, Associate Counsel, Philanthropic Giving  

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Advisors play a key role in helping clients turn financial success into lasting impact through charitable giving. With tax law changes in recent years, advisors play an even more important role in helping clients maximize their tax savings through charitable gifts. While the Tax Cuts and Jobs Act of 2017 and the One Big Beautiful Bill Act that was recently signed into law have changed the rules for itemized deductions, smart strategies still allow donors to give generously and save on taxes.

“Bunching” is a strategy that helps charitably-inclined clients clear new thresholds, maximize deductions, and maintain steady support for the causes they love. Paired with donor-advised funds, it remains a simple, effective way to align generosity with tax efficiency.

What Is Bunching?

Bunching is the practice of consolidating multiple years’ worth of charitable donations into a single tax year. By frontloading contributions, taxpayers can surpass the standard deduction threshold and take advantage of itemizing in that year. In the following year(s), they revert to taking the standard deduction or give less in that year.  

The result? Greater tax savings without reducing your client’s overall charitable giving.

Enhancing Bunching with Donor-Advised Funds

Donor-Advised Funds (DAFs) are often the perfect complement to bunching. Your clients can make a large, deductible contribution to a DAF in one year, then recommend grants to charities over several years. This preserves the client’s giving pattern while securing the tax benefit upfront.

Why is Bunching Still a Good Strategy Post-OBBBA?

The OBBBA introduces a 0.5% AGI floor for charitable deductions by itemizers—meaning only contributions above that threshold are deductible. Bunching helps donors surpass this minimum and maximize their deductions in a single year.

Secondly, OBBBA limits high-income clients’ deduction value to 35% of their donations, down from 37%; however, itemizers still benefit from timing strategies, like bunching.

And lastly, the New Universal Charitable Deduction for Non-Itemizers ($1,000 single filers / $2,000 joint filers on cash donations) is modest and doesn’t apply to donor-advised funds (DAFs), so high-value giving still needs itemizing strategies.

Final Thoughts

Bunching isn’t right for every client, but for many, it strikes the perfect balance between generosity and tax efficiency. By integrating this strategy into charitable planning conversations, advisors can help clients achieve both their financial and philanthropic goals. Before the OBBBA charitable floor kicks in after January 1, taxpayers should consider making more significant charitable gifts this tax year.

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