Most people who give to charity every year get no tax benefit for it. Since the standard deduction nearly doubled in 2018, the share of tax returns that itemize has dropped from 31 percent in 2017 to just 9.5 percent in 2022, according to the Tax Policy Center. For the other nine in ten filers, a year of generous giving often looks no different on a tax return than a year of no giving at all.
Charitable bunching changes that. By grouping several years of planned giving into a single year, donors can clear the standard deduction, itemize, and then go back to the standard deduction in the years in between. At UI Charitable, we help donors and their advisors use this strategy every year. Here's how it works, what it looks like with 2026 numbers, and who it fits best.
What Is Charitable Bunching?
Every year, taxpayers choose between the standard deduction and itemizing, whichever is larger. For tax year 2026, the IRS set the standard deduction at $16,100 for single filers, $24,150 for heads of household, and $32,200 for married couples filing jointly. If a household's mortgage interest, state and local taxes, and charitable gifts don't add up to more than that, its giving produces no extra deduction.
Bunching works around that threshold. Instead of giving the same amount every year, a donor combines two, three, or five years of planned giving into one contribution. That year, itemized deductions clear the standard deduction by a wide margin. In the other years, the donor takes the standard deduction as usual.
Why a Donor-Advised Fund Makes Bunching Work
The obvious problem with bunching is that most donors don't want their favorite charities to get five years of support in one year and nothing for the next four. A Donor-Advised Fund (DAF) solves that by separating the timing of the deduction from the timing of the gift.
Contribute several years of giving to a DAF in one year. The donor claims the full deduction in the year of the contribution.
Let the balance stay invested. Funds in the DAF can be invested and grow tax-free while they wait to be granted.
Recommend grants on the usual schedule. Charities keep receiving steady, predictable support every year, while the donor takes the standard deduction in the off years.
Donors can also bunch with appreciated stock or other assets instead of cash. Giving appreciated assets held more than a year generally avoids capital gains tax and allows a deduction for fair market value, which stacks a second tax benefit on top of the first.
Example: Bunching Five Years of Giving
A married couple filing jointly gives $12,000 a year to charity. They also pay $10,000 in state and local taxes and $8,000 in mortgage interest each year.
Without bunching: Their itemized deductions total $30,000, which is $2,200 short of the $32,200 standard deduction. They take the standard deduction every year, and their $12,000 in annual giving produces no additional tax benefit.
With bunching: In year one, they contribute $60,000 (five years of giving) to a Donor-Advised Fund. Their itemized deductions jump to $78,000. In years two through five, they take the standard deduction, while recommending $12,000 in grants from the DAF each year.
Year | Without bunching | With bunching |
Year 1 | $32,200 (standard) | $78,000 (itemized) |
Years 2–5 | $32,200 each (standard) | $32,200 each (standard) |
5-year total deductions | $161,000 | $206,800 |
The couple gives the same $60,000 over five years either way, and their charities receive the same $12,000 each year. Bunching adds $45,800 in deductions. For a household in the 24% federal bracket, that's roughly $11,000 in federal tax savings, money that can stay in the family's budget or go right back into their giving.
This example is simplified for illustration. Deductions are subject to income-based limits, and actual savings depend on each donor's tax situation.
Who Bunching Fits Best
Consistent annual givers whose itemized deductions land near or just under the standard deduction.
Donors with a high-income year, such as a bonus, business sale, or Roth conversion, who want a larger deduction when their tax rate is highest.
Donors holding appreciated stock or other assets who can fund several years of giving at once without selling.
Retirees with a paid-off mortgage who have lost one of their largest itemized deductions.
Key Considerations Before Bunching
1. Contributions are irrevocable. Once assets go into a Donor-Advised Fund, they belong to the sponsoring charity.
2. Watch the deadline. To count for a given tax year, the contribution has to be completed by December 31. Complex assets can take extra time to transfer, so start early.
3. Keep the grants flowing. Bunching only helps charities if the grants actually go out. Set a grant schedule for the years in between so support stays steady.
4. Plan around the rest of the return. Income limits on charitable deductions and recent tax law changes can affect the result. High earners should note that, starting in 2026, the IRS says the One, Big, Beautiful Bill "imposes a limitation on the tax benefit from itemized deductions" for taxpayers in the 37% bracket.
5. Loop in a tax advisor. The right number of years to bunch depends on each household's income, deductions, and goals.
Frequently Asked Questions
How do I know if bunching makes sense for me? Add up your yearly mortgage interest, state and local taxes, and charitable giving. If the total lands close to or below the standard deduction ($32,200 for married couples filing jointly in 2026), your giving likely isn't lowering your taxes, and bunching may help.
Do I need a Donor-Advised Fund to bunch? No, but it makes bunching much easier. Without one, a donor would have to give several years of support directly to charities in one year. A DAF lets you take the deduction now and recommend grants to charities on your normal schedule.
How many years of giving should I bunch? It depends on how far your deductions fall below the standard deduction and how much you give each year. Many donors bunch two to five years. A tax advisor can help model the right number.
Final Thoughts
With fewer than one in ten filers itemizing, most donors are giving without any tax benefit. Bunching doesn't ask anyone to give more. It changes when the deduction happens, so the same generosity can go further. Paired with a Donor-Advised Fund, charities still get steady support every year, and donors get a deduction that actually counts.
If you or your clients give consistently and want to see what bunching could look like, UI Charitable can help you run the numbers. Reach out to our team to get started.
A donor's ability to claim itemized deductions is subject to a variety of limitations depending on the donor's specific tax situation. UI Charitable does not provide legal or tax advice. Please consult a qualified legal or tax advisor where such advice is necessary or appropriate.
Sources
Internal Revenue Service, IRS releases tax inflation adjustments for tax year 2026, including amendments from the One, Big, Beautiful Bill (IR-2025-103, Oct. 9, 2025)
Tax Policy Center, What are itemized deductions and who claims them?
