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A donor-advised fund (DAF) lets you take a charitable tax deduction this year while deciding which charities to support, and when, over the years ahead. Under the new federal rules that took effect in 2026, that flexibility has become one of the most valuable tax planning tools available to charitably minded taxpayers.

The One Big Beautiful Bill Act (OBBBA), signed in July 2025, changed the math of giving. Starting with the 2026 tax year, taxpayers that itemize can deduct only the portion of their charitable gifts that exceed 0.5% of adjusted gross income (AGI). Taxpayers in the top 37% bracket also see the value of their itemized deductions capped at 35%. Giving the same way you always have may now produce a smaller tax benefit.

What is a donor-advised fund?

A DAF is a charitable giving account held by a sponsoring public charity and managed by your financial advisor. You contribute cash, stock or other assets, receive an immediate tax deduction, and the assets are invested for growth. Whenever you are ready, you recommend grants from the account to the IRS-qualified charities you care about: your place of worship, alma mater, local food bank or a national cause.

Think of it as your family's personal charitable foundation, without the cost, paperwork or excise taxes of a private foundation.

Benefit 1: An immediate deduction for cash gifts

Because the DAF sponsor is a public charity, cash contributions are deductible in the year made, up to 60% of your AGI. The OBBBA made this 60% limit permanent. Any amount above the limit can be carried forward and deducted over the next five years.

Your deduction is locked in on the date of the contribution, not the date a charity eventually receives a grant. That timing is what makes the DAF so effective in a high-income year: a large bonus, a business sale, a Roth conversion, or the exercise of stock options.

Benefit 2: Give appreciated stock and never pay the capital gains tax

For many clients, the most powerful way to fund a DAF is with long-term appreciated securities rather than cash. When you contribute shares held more than one year, you generally deduct their full fair market value, and neither you nor the DAF pays capital gains tax on the appreciation.

Consider a holding worth $50,000 that you bought years ago for $10,000:

Example Option 1: Sell the stock, then donate the cash
Built-in gain: $40,000
Federal capital gains tax (23.8%, incl. 3.8% NIIT): $9,520*
Amount available for charity: $40,480
Charitable deduction: $40,480

Example Option 2: Contribute the shares to your DAF
Built-in gain: $40,000
Federal capital gains tax: $0
Amount available for charity: $50,000
Charitable deduction: $50,000

*Assumes the top federal long-term capital gains rate plus the net investment income tax; CA taxes capital gains as ordinary income at rates up to 13.3%, which widens the advantage further.

Deductions for appreciated stock are limited to 30% of AGI in a given year, with the same five-year carryforward. Contributing shares also provides us with a tax-efficient way to rebalance a concentrated or low cost-basis position: you give the appreciated shares, and we can repurchase the position or diversify in your taxable account with cash, resetting your cost basis higher.

Benefit 3: Bunch several years of giving into one year to clear the new 0.5% floor

The new 0.5% of AGI floor applies every year you itemize. Give a steady amount annually and you lose the first slice of your gifts to the floor year after year. Combine several years of planned giving into a single DAF contribution and you face the floor only once.

Take a married couple with $400,000 of AGI who give $20,000 a year. Their annual floor is $2,000 (0.5% of $400,000). 

Approach over five years (Example)

Example Option 1: Give $20,000 directly each year*
Total given: $100,000
Lost to the 0.5% floor: $10,000
Deductible amount: $90,000

Example Option 2: Contribute $100,000 to a DAF in one year*
Total given: $100,000
Lost to the 0.5% floor: $2,000
Deductible amount: $98,000

*Assumes the couple itemizes, AGI is unchanged, and contributions fall within the applicable AGI limits 

Bunching delivers a second benefit. With the standard deduction now $32,200 for married couples filing jointly in 2026, many people find that ordinary annual gifts barely move them past it. A large contribution in one year can push you well above the standard deduction, so that every dollar beyond it does real work. In the off years, you simply take the standard deduction while your DAF continues making grants to your charities.

Deduct this year, give on your own timeline

The deduction and the grant are separate decisions. You claim the full deduction in the year you fund the DAF, then recommend grants to your chosen charities whenever you like: next month, over the next five years, or as new causes emerge.

• No deadline to grant. You can support the same charities on the same schedule you always have, and they receive steady, predictable support.

• Time to decide. If you have a liquidity event this year but haven't settled on your long-term giving priorities, you can capture the deduction now and choose recipients thoughtfully later.

• Tax-free growth. While the assets wait to be granted, they remain invested, and any growth stays in the account for future charity.

• Family involvement. You can name successor advisors, such as children or grandchildren, to carry on your family's giving and build a philanthropic legacy.

How your DAF works

With a DAF, your charitable dollars stay invested under the same disciplined approach we apply to the rest of your investment assets, while trusted partners handle the administration and safekeeping.

Partner: Copper Crest Capital
Role - Investment Manager: Manages the DAF’s investments in line with your giving timeline and goals, and coordinates the strategy with your overall tax and financial plan

Partner: Renaissance Charitable Foundation Inc. (working with Schwab)
Role - Sponsoring Public Charity: Serves as the DAF sponsor and administrator that accepts contributions, issues tax receipts, verifies charities and processes the grants you recommend

Partner: Charles Schwab
Role - Account Custodian: Holds the charitable assets as custodian, providing institutional-grade safekeeping and reporting

The result is one coordinated relationship. You recommend the grants, Renaissance and Schwab deliver them to your chosen charities, and Copper Crest manages the remaining balance for future giving.

A few things to know before you give

• Contributions are irrevocable. Once assets are in the DAF, they are committed to charity. You advise on grants, and the sponsor approves them, but the funds cannot return to you.

• Grants must go to qualified charities. A DAF grant cannot pay for event tickets, membership benefits or other personal benefits, or satisfy a legally binding pledge.

• The new non-itemizer deduction excludes DAFs. Beginning in 2026, taxpayers who take the standard deduction can deduct up to $1,000 ($2,000 for joint filers) of cash gifts, but gifts to a DAF do not qualify.

• Timing matters. To count for this tax year, contributions must be completed by December 31. Transfers of securities can take several business days, so we recommend starting early in the fourth quarter.

Let Copper Crest help build your giving plan

If you expect to give over the next several years, are holding highly appreciated stock, or are facing a high-income year, a DAF may let you give more and keep more. Contact your Copper Crest Capital advisor to model your deduction under the new rules, identify the best assets to contribute, and open your account.

Key Takeaways:

• A 529 plan is a tax-advantaged savings account designed to help families save for qualified education expenses, including college, K-12 tuition, and certain post-secondary training programs. 
• Post-contribution earnings are tax-free at the federal and state level.
• While 529 contributions are not tax deductible for federal purposes, some states do offer tax deductions for contributions. 
• Qualified withdrawals are tax-free at both federal and state levels when used for eligible educational expenses, such as tuition, books, and room and board. 
• Unused 529 funds can be rolled over into a Roth IRA (up to $35,000 lifetime) under certain conditions, avoiding taxes and penalties on closing withdrawals.

Introduction to 529 plans

The unrelenting rise in education costs in the US since the 1980s has created an affordability and accessibility problem for most American families. To help address the problem, in 1996 internal revenue code section 529 authorized US states to establish “qualified tuition programs” (QTPs), now called 529 plans, to help families save for future education expenses. The benefits of 529 plans have improved significantly since their introduction including tax-free withdrawals on qualified spending, portability between beneficiaries, and more recently the ability to rollover unused funds to a Roth IRA account. 

Parents, grandparents, other relatives and even certain trusts can own and contribute to a 529 plan in the name of a beneficiary. All 529 plans are state sponsored, so annual and total contribution limits vary.

Each client’s tax situation and education savings goals are different, so creating a 529 plan may not be suitable for you and your family. The following paragraphs provide some helpful information to consider in deciding whether a 529 plan may be right for you. 

Earnings are non-taxable

Contributions are made on an after-tax basis, so they are not federally tax deductible. However, all post-contribution earnings (including growth in investments within the 529 plan account) are tax-free at the federal and state level. Typically, you can contribute a maximum of $19,000 per beneficiary ($38,000 if married filing jointly) without reducing your lifetime exclusion. You may also choose to contribute $95,000 ($190,000 if married filing jointly) in a single year and treat it as a gift occurring over a 5-year period.

Qualified education spending is tax-free

Qualified withdrawals from a 529 plan are tax free at the federal and state level if used to pay for a beneficiary’s qualified educational expenses at eligible institutions. Qualified expenses include tuition, room and board, enrollment fees, books and equipment, among other costs. Annual withdrawals for beneficiaries are generally unlimited for post-secondary education but are capped at $20,000 per year for K-12 tuition. 

Additional state tax benefits for contributions

While California does not allow a tax deduction for contributions to 529 accounts, certain states do. Residents of eligible states can get an added benefit of an up-front state level tax deduction or tax credit, along with state and federal tax-free account growth which can significantly reduce the after-tax cost of education. 

Unused 529 balances can now be rolled over into a Roth IRA

Recent changes to 529 plan rules now allow for plan owners to rollover unused balances into a Roth IRA up $35,000 ($7,000 per year for 5 years) without incurring the unqualified withdrawal penalty or generating taxable income. Additional restrictions apply, but today’s 529 plans offer significantly more eligible spending options and reduce the cost and worry of overinvesting in 529 plans. Prior to the added Roth IRA option, restrictions left account owners with limited choices for unused 529 plan balances: either transfer to a new beneficiary or generate a taxable distribution to the account owner along with a 10% federal withdrawal penalty.