After the Bunch: Why Donor-Advised Funds Deliver Long After the Deduction

For many advisors, the end of 2025 was a sprint. High-earning clients wanted to maximize charitable deductions before the 0.5% floor and 35% cap on charitable deductions took effect on January 1, 2026 under new tax laws. Donor-advised funds in particular played a big role in many late-2025 planning strategies because affected taxpayers could transfer assets to a donor-advised fund in 2025, achieve optimal tax results, and then recommend grants to their favorite charities from the donor-advised fund in 2026 and beyond.

Now that the calendar has turned, we're hearing the same question from advisors: do donor-advised funds still make sense? Absolutely yes! Donor-advised funds remain a highly relevant and strategic tool for your clients - and the reasons go well beyond the tax code.

The Tax Benefit Is Only Part of the Story

No one gives away a dollar to save 35 cents. Your clients' charitable intent is driven by values, legacy, and a desire for real community impact. The new deductibility limits may reduce the marginal tax benefit for some clients, but they change nothing about what a donor-advised fund actually does: it gives clients a flexible, organized home for their philanthropy, with the ability to separate the timing of their contribution from the timing of their grants. That flexibility matters whether the tax landscape is favorable or constrained.

What Sets a Community Foundation Donor-Advised Fund Apart

National platforms offer convenience. A donor-advised fund at the Community Foundation offers something more: a relationship. Our team knows this region, its nonprofits, its gaps, and its opportunities. When a client wants to make a meaningful gift to a neighborhood organization rather than a household name, we know exactly where to look. When a client's priorities shift, we're here to help them think it through.

We also know our donors - their families, their histories, and how their giving fits into a broader estate and legacy plan. We've helped clients structure funds that involve adult children in philanthropic decisions and outlive their original donors. That kind of continuity and depth doesn't come from a 1-800 number.

What This Means for Your Practice

A donor-advised fund at the Community Foundation integrates cleanly into a client's estate plan, smooths charitable giving across years as income ebbs and flows, and serves as a platform for strategic philanthropy that can evolve alongside a client's life. It makes your job easier and your clients' giving more intentional.

If your clients are rethinking their charitable strategy in the wake of last year's bunching push, this is a good moment to revisit the conversation - and an even better moment to loop us in.

Let's talk. We'd love to be part of your next client conversation about giving.