Donor-Advised Funds Explained: A Powerful Tax Planning Strategy for 2026

Could a Donor-Advised Fund help you give to the charities you care about while creating a more strategic Tax Planning opportunity? In this video, I explain how a Donor-Advised Fund (DAF) works and why taxpayers who regularly give to charity, own highly appreciated investments, or expect a high-income year may want to consider one as part of their proactive Tax Planning. We cover: • How a Donor-Advised Fund works • When you receive the charitable Tax Deduction • How bunching several years of charitable giving can work • The new 0.5% charitable deduction floor beginning in 2026 • How appreciated stock can potentially provide a charitable deduction while avoiding recognition of embedded capital gains • Who may benefit most from considering a DAF Beginning in 2026, taxpayers who itemize generally can deduct charitable contributions only to the extent they exceed 0.5% of their contribution base, generally AGI. This makes the timing and structure of charitable giving increasingly important. Long-term appreciated capital-gain property donated to qualifying public charities can also be particularly valuable. When the requirements are satisfied, the deduction can generally be based on fair market value, with appreciated capital-gain property generally subject to a 30% of AGI limitation. A Donor-Advised Fund isn't right for everyone, but for the right taxpayer it can provide flexibility in deciding when to take the charitable deduction and when to recommend grants to qualifying charities. Once contributed, the sponsoring charity has legal control of the assets while the donor retains advisory privileges regarding grants and investments. If you enjoy practical Tax Planning strategies that help you make more informed financial decisions, uncover potential Tax Savings opportunities, and become more proactive about your taxes, please subscribe to the Holistic Advisory YouTube channel. Holistic Advisory Proactive Tax Planning. Lasting Impact. This content is for education