For many CPAs, estate planning attorneys, and financial advisors, the end of 2025 brought a whirlwind of charitable planning activity among high-earner clients.
That’s because many taxpayers wanted to maximize the tax benefits of their charitable donations before the 0.5% “floor” and 35% “cap” on charitable deductions kicked in on January 1, 2026 under new tax laws. Donor advised funds (DAFs) in particular played a big role in many late-2025 planning strategies because affected taxpayers could transfer assets to a DAF in 2025, achieve optimal tax results, and then thoughtfully recommend grants to favorite charities from the DAF in 2026 and beyond.
So what now? Should you still recommend that your clients establish and use DAFs at the Foundation to organize their charitable giving?
Absolutely yes! DAFs remain a highly relevant and strategic tool for your clients. The IRS’s new deductibility limits may reduce the marginal tax benefit of giving for some of your clients, but nothing has changed about the DAF’s broader planning advantages for all of your charitable clients. Here’s why:
- Fundamentally, regardless of tax benefits, your clients’ charitable intent is driven by values, legacy, and a desire for community impact. (No one gives away a dollar to save 35 cents!) That’s why you want to offer your clients the most effective charitable planning vehicles available to achieve charitable goals.
A DAF at the Foundation often plays a crucial role in a client’s overall philanthropy structure. Here’s why:
- A DAF still allows clients to separate the timing of their charitable deduction from the timing of their actual grants to favorite charities, thereby preserving flexibility in years when income is unusually high or coming in handy when planning around liquidity events, even if the deduction is partially constrained under new laws.
- Community foundation DAFs, in particular, provide benefits that extend well beyond the tax code. That’s because of our team’s local expertise, deep knowledge of regional nonprofits, and ability to help your clients align their giving with real community needs.
- When you work with the Foundation, you can confidently recommend a DAF because you know the client will receive administrative simplicity, top-notch service, and plenty of opportunities for deep community connections and multigenerational philanthropy.
In short, DAFs at the Foundation support your clients’ holistic wealth and legacy planning goals. GWCF makes it easy for you, as the advisor, to integrate a DAF into a client’s estate plan, use a DAF to smooth charitable giving over time as a client’s income ebbs and flows, and lean on the DAF as a platform for strategic philanthropy that can evolve alongside a client’s unique life and financial circumstances.
