Bunching charitable gifts, year-end, and getting ahead

by SCF Team | August 1, 2026 | Siouxland Community Foundation Blog, Advisor Resources

The final weeks of summer are an ideal time to revisit charitable giving strategies with clients before year-end planning accelerates.

One strategy worth discussing is “bunching” charitable contributions. The concept became widely discussed after the Tax Cuts and Jobs Act of 2017 substantially increased the standard deduction. Historical data shows that many taxpayers who once itemized shifted to the standard deduction.

Since 2026, planning has become even more nuanced. The One Big Beautiful Bill Act added two important limitations:

• Under Internal Revenue Code Section 170, itemized charitable deductions generally must exceed 0.5% of adjusted gross income before a deduction is available.
• Section 68 effectively limits the tax benefit of itemized deductions for taxpayers in the highest marginal tax bracket to 35%.

These provisions are often called the charitable deduction “floor” and “cap.”

So how does bunching work?

• Instead of making similar charitable gifts each year, a client may consolidate two or more years of planned contributions into one tax year.
• By concentrating gifts into one year, the client may be better positioned to itemize that year and claim the standard deduction in later years.

A donor-advised fund at the Siouxland Community Foundation can make this strategy easier. A client can make one larger contribution, generally claim the deduction in that year under Internal Revenue Code Section 170(a), and then recommend grants to favorite charities over time.

Two additional year-end reminders:

• Gifts of long-term appreciated publicly traded securities can be especially tax-efficient. Under Internal Revenue Code Section 170(e)(1)(A), clients may generally deduct fair market value, subject to applicable AGI limitations, while avoiding recognition of built-in capital gain.
• Qualified Charitable Distributions allow IRA owners age 70½ or older to give directly to charity tax-free, up to the 2026 annual limit of $111,000, even before required minimum distributions begin. This can potentially lower adjusted gross income and reduce taxes on Social Security benefits and Medicare premiums.

The Siouxland Community Foundation is happy to work with you throughout the year to structure charitable gifts around your clients’ financial and philanthropic goals. Reach out anytime to get a jump on year-end planning.

The team at the Siouxland Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This blog is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.