2026 Charitable Deductions for non-itemizers - Can I donate using a DAF?

[Cris]

I'm looking for some best practices for Charitable Donations assuming I do NOT itemize.  I have a Fidelity Donor Advised Fund Account with Fidelity Charitable.  I normally give to our local church through this DAF.  I believe DAFs are ineligible for non-itemizers in 2026.  So, if this is true then I would think it would be advisable to donate cash (via a credit card) to our church for the first $2,000 (MCFJ) of contributions in 2026.  My thought would be to use the DAF for anything above the first $2,000.  I assume if later in 2026 I change my mind and decide to itemize I can include that $2,000 + anything I contribute via the DAF in my itemized deductions over and above 0.5% of my AGI.  Does this make sense or is there a better approach for 2026?

[rjs]

Contributions from a DAF to a charity are never tax deductible. You already took the deduction (or could have taken it) when you put the money into the DAF. Sending a contribution from a DAF to a charity does not give you an additional deduction. It doesn't matter whether you are itemizing or not.

[rjs]

You are correct that contributions to a DAF are not eligible for the deduction for non-itemizers.

[Cris]

Yes, I understand that I took the deduction when the money is put into the DAF.  And I also understand that when I contribute from a DAF to a charity that I don't get an additional deduction.   Perhaps the way I worded the question was confusing.  But that was not the point of my question.  I was asking about best practices when you do not itemize using cash vs. contributing into a DAF.  By using the cash approach, I can take the $2,000 deduction.  If I contribute into a DAF and I don't itemize I cannot take the $2,000 deduction in 2026.  So, I wanted some feedback if it made sense to do a $2000 cash donation to our church to ensure we get the $2,000 deduction.  And if I want to contribute more than $2,000 contribute into the DAF after the initial cash contribution.  In other words if I want to contribute a total of $4,000 have the first $2000 be cash and the second $2,000 into the DAF.  That way I can maximize my contribution whether I don't itemize or if I do itemize.

[rjs]

I think what you're saying is that you're not sure whether you will itemize or not. In that case, yes, it makes sense to donate $2,000 cash directly to the church so you will be sure of getting a deduction whether you itemize or not. Then, if you want to donate more, it makes no difference whether you make the additional donations to the DAF or directly to the church. Your deduction, itemized or not, will be the same.

I don't understand what you would accomplish by splitting your donations between the church and the DAF. The only advantage would be if you want to take the full deduction this year but put off giving some of the additional money to the church until next year. And that only works if you itemize.

If you do not itemize, and you donate $2,000 cash to the church, you will get a $2,000 deduction. The church gets $2,000. Any additional donations to either the church or the DAF would not be deductible.

If you do itemize, and you donate $2,000 cash to the church and $2,000 to the DAF your total contributions will be $4,000. You will get an itemized deduction of $4,000 minus 0.5% of your AGI. Since you are itemizing, you don't get the $2,000 deduction for non-itemizers. You might as well just give $4,000 to the church or $4,000 to the DAF. The resulting deduction is the same. The church gets $4,000 either way, unless you defer the distribution from the DAF to the church.

[DawnC · Accepted solution]

As mentioned above, yes, giving the church the 2k directly will ensure you get a deduction if you end up using the standard deduction.   

[Cris]

I like to keep my options open.  At this point in time, I will likely use the standard deduction.  But I can't predict the future.  It is possible that in December I decide I want to itemize.

Regarding using cash or DAF, cash for the first $2,000 seems like it makes the most sense if I take the standard deduction.  You are correct the church would get the same amount, so no difference with that.  But if I contribute to the DAF, I will likely use appreciated stock which would be beneficial from a capital gains perspective.  I have the DAF account already in place and things go very smoothly transferring shares from financial institution A to the DAF.  And the process of granting to the church also goes smoothly.  With the DAF I can invest the funds and grant at a later date or give to another charity.  Again, keeping my options open.