Bunching: A Year-End Giving Strategy Worth Knowing

When “back to school” enters the conversation, it’s a pretty good reminder that the rest of the year will go by quickly. Before fall calendars fill up and the holidays arrive, now is a good time to check in on your charitable goals for 2026.

A little planning now can make it easier to coordinate your charitable giving with your overall financial and tax planning—and avoid making important decisions in the final few weeks of December.

One strategy worth discussing with your tax and financial advisors this year is “bunching” charitable gifts.

What is bunching?

Bunching is a strategy that combines two or more years of planned charitable giving into a single tax year.

For example, instead of making similar charitable contributions in 2026, 2027, and 2028, you might choose to make a larger charitable contribution in 2026. Concentrating those gifts into one year may help some taxpayers accumulate enough deductions to make itemizing more beneficial than taking the standard deduction.

This strategy may be particularly relevant in 2026 because of changes to federal charitable deduction rules. Beginning this year, taxpayers who itemize can generally deduct charitable contributions only to the extent they exceed 0.5% of adjusted gross income (AGI). Additional limitations apply to taxpayers in the highest federal income tax bracket.

Your individual circumstances will determine whether bunching makes sense, which is why conversations with your CPA, financial advisor, or other tax professional are important.

Where does a donor-advised fund fit in?

One challenge with bunching is that you may want the potential tax advantages of making a larger charitable contribution this year without changing how much your favorite nonprofits receive each year.

That’s where a donor-advised fund (DAF) at the Greater Manhattan Community Foundation can help.

You can contribute several years of planned charitable giving to your DAF in one year and generally be eligible for a charitable income tax deduction in that year, subject to applicable tax rules and limitations. Then, you can recommend grants from your fund to your favorite nonprofit organizations over the following months and years.

This allows you to be strategic about when you make your charitable contribution while continuing to provide nonprofits with the consistent support they count on.

Think beyond cash

A donor-advised fund can also accept certain assets beyond cash, including appreciated securities.

If you own stock that has significantly increased in value, donating the shares directly to a charitable fund may offer additional tax advantages compared with selling the stock and donating the proceeds. Depending on your circumstances, you may be able to avoid recognizing capital gains on the donated securities while potentially qualifying for a charitable deduction.

Again, your tax and financial advisors can help determine whether this strategy is appropriate for you.

Start the conversation early

Year-end charitable planning doesn’t have to happen at year-end.

Now is a great time to review the organizations and causes you want to support, consider how charitable giving fits into your broader financial plans, and talk with your professional advisors about strategies such as bunching.

The team at the Greater Manhattan Community Foundation is also here to be part of that conversation. Whether you already have a donor-advised fund, are interested in establishing one, or simply want to explore your charitable giving options, we’re happy to help you find an approach that reflects what matters most to you.

A little planning today can give you more flexibility to make a meaningful impact tomorrow.

This information is provided for educational purposes and should not be considered tax, legal, or financial advice. Please consult your professional advisors regarding your individual circumstances.