3 Ways a Donor Advised Fund Can Help You Give Strategically Before Year-End
As the year comes to a close, many people start thinking about how to give back in ways that are both meaningful and strategic. A donor advised fund (DAF) at One Valley Community Foundation can help you do both. It offers a simple way to make a charitable contribution now, receive an immediate tax deduction, and take your time deciding which causes to support.
Opening a fund with One Valley keeps your generosity rooted in Gallatin County, where your gifts strengthen the nonprofits, people, and places that make this community thrive.
Here are three smart ways a DAF can help you make the most of your year-end giving.
1. Bundle your giving before upcoming tax changes
A major shift is coming in how charitable deductions work. Beginning in 2026, H.R. 1, P.L. 119-21 (often referred to as the One Big Beautiful Bill Act) will implement new rules that reshape how both itemizers and non-itemizers approach charitable giving. For many donors, 2025 offers a one-time opportunity to plan ahead and make their generosity go further.
Here is what is changing:
Non-itemizers: For the first time in years, those who take the standard deduction can claim a charitable deduction of up to $1,000 for single filers or $2,000 for married couples filing jointly.
Itemizers: Starting in 2026, a new 0.5% floor will apply to charitable deductions. Only the portion of your giving that exceeds 0.5% of your adjusted gross income (AGI) will qualify for a deduction. For corporations, the floor will be 1%.
This new rule could limit deductions for smaller, one-time gifts. The good news is that 2025 offers a unique opportunity to plan ahead. By contributing to a donor advised fund this year, you can take advantage of current deduction rules and maintain the flexibility to support your favorite causes over time.
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How it works
Front-load your giving in 2025: Instead of spreading your annual gifts across several years, contribute multiple years’ worth of giving to your DAF this year. You will receive the full charitable deduction under 2025 rules.
Grant over time: Once your fund is established, you can recommend grants to nonprofits whenever you choose, even after the new rules take effect in 2026.
Choose how you give: You can contribute cash, or for even greater impact, donate long-term appreciated securities. This approach provides two advantages: you avoid capital gains tax on the appreciation and receive a deduction for the asset’s current market value*.
Why it matters
This strategy, often called bunching or bundling, allows you to lock in today’s higher deduction limits while continuing to support your favorite causes in the years ahead. You get the tax benefit now, and your giving remains steady and strategic over time.
Example: giving now for greater flexibility later
Jordan plans to give $25,000 per year to local nonprofits starting in 2025. Over the next several years, that will total $100,000 or more.
If Jordan gives directly to charities each year: The new 0.5% AGI floor starting in 2026 would reduce the total deductible amount to about $85,000.
If Jordan contributes the full $100,000 to a donor advised fund at One Valley in 2025: Jordan receives the entire deduction this year and continues to make $25,000 in annual grants to nonprofits over time.
Because her fund is invested by One Valley, Jordan’s balance continues to grow even as she gives. This allows her to keep supporting her favorite causes year after year, from environmental conservation and local arts to animal welfare and community wellness. What began as a single year of strategic planning became a lasting rhythm of generosity that strengthens Gallatin County for years to come.
2. Donate Appreciated Assets Instead of Cash
Giving back does not have to mean writing a check. Some of the most impactful gifts come from non-cash assets that have grown in value over time. If you own investments such as stocks, real estate, or other long-term appreciated assets, contributing them directly to a donor advised fund can be one of the most effective ways to make your generosity go further.
When you donate appreciated assets, you can claim a charitable deduction for their fair market value*, and the DAF, as a public charity, can sell them tax-free. This approach enables you to contribute more to the causes you care about while maintaining a balanced financial plan.
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How it works
Contribute appreciated assets directly: When you donate long-term appreciated assets, you can claim a deduction for their current fair market value*, and the DAF sponsor (One Valley) can sell them without incurring capital gains tax.
Give more without increasing your cost: Because the full value of your asset supports charitable causes, more of your contribution goes toward impact rather than transaction costs.
Support what matters most: Once your DAF is established, you can use it to make grants to local nonprofits working in areas that reflect your values, from housing and education to conservation and mental health.
Why it works
Donating appreciated assets can be a simple yet powerful strategy. It enables you to meet your philanthropic goals, manage your portfolio, and make a lasting impact in your community. You are not reducing what you give, you are increasing what your giving can do.
Example: giving stock for greater good
Maria purchased stock years ago for $10,000 that has since grown to $25,000. She wants to use it to support the community she loves.
If Maria sells the stock and donates the proceeds: She would owe about $2,250 in capital gains tax on the $15,000 increase (assuming a 15%), leaving $22,750 available to give.
If Maria donates the stock directly to her donor advised fund at One Valley: The DAF sells the stock tax free, and she receives a charitable deduction for the full $25,000 value.
By donating the stock instead of selling it first, Maria can give $2,250 more to the causes she cares about and eliminate the capital gains tax entirely.
Over the next few years, Maria’s fund is invested by One Valley and continues to grow, allowing her to make an even greater impact over time. She uses it to support youth mentorship programs, affordable housing initiatives, and food security efforts across Gallatin County. What began as a smart financial decision has become a lasting legacy of care for her neighbors.
3. Maximize the Impact of Your Business Sale
Selling a business is a defining milestone. It represents years of dedication and innovation coming to fruition. Along with the financial rewards often come new questions: What is next, and how can this success continue to make a difference?
If you are preparing to sell your company or anticipate a liquidity event, a donor advised fund can help you give strategically and with purpose. By contributing a portion of your company’s stock or sale proceeds to a DAF before the sale is finalized, you can make a charitable gift at the same time you complete the transaction. You may be eligible for an immediate charitable deduction for the fair market value of your contribution, subject to IRS limits, and those funds will be available for you to support local causes over time.
Working with One Valley Community Foundation ensures that your giving remains personal and deeply local. Your DAF can become a flexible tool for long-term philanthropy that aligns your financial planning with the impact you want to create right here in Gallatin County.
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How it works
Contribute before the sale: Donating part of your company’s stock or proceeds to a DAF before the sale is complete allows you to make your charitable gift as part of the transition. Because the DAF sponsor (One Valley) is a public charity, your contribution is received and sold tax-free, ensuring more of its value goes directly to charitable use.
Receive an immediate charitable deduction: You can claim a deduction for the fair market value of your contribution, up to IRS limits, helping you pair generosity with thoughtful financial planning.
Support local causes over time: Once your DAF is established, you can make grants whenever you are ready. Your fund can support local and national nonprofits addressing the causes you care about most.
Timing matters
To make the most of this opportunity, your contribution must be completed before a sale agreement becomes binding. Planning ahead with your advisor and the One Valley team ensures your DAF is ready when it counts.
A simpler alternative to a private foundation
While some business owners choose to create a private foundation, a DAF often provides similar benefits with less complexity. It is faster to open, easier to manage, and allows for higher deduction limits.
Example: turning a milestone into momentum
When Tyler decided to sell his business for $5 million, he wanted part of that success to give back to the community that supported him. He planned to contribute $1 million to a donor advised fund at One Valley.
If Tyler waited until after the sale: He would pay about $200,000 in capital gains tax on that portion of the proceeds before contributing the remaining amount to charity.
If Tyler donates a $1 million ownership interest before the sale: The donor advised fund receives the full $1 million value, with no reduction for capital gains tax, allowing more of his gift to support charitable work.
In both cases, Tyler’s philanthropic goal is the same, but by contributing before the sale, every charitable dollar works harder.
Over the next several years, his fund, invested by One Valley, continues to grow. Tyler uses it to support workforce development, entrepreneurship programs, and access to healthcare across Gallatin County. His business success becomes a foundation for opportunity and well-being in the community he helped build.
A donor advised fund with One Valley Community Foundation makes it easy to give with purpose. Our team works with you to align your goals with local needs and ensure your generosity creates lasting impact across Gallatin County.
Ready to get started?
Now is the time to plan ahead and make the most of your year-end giving. Set up a time to meet with our team or open a fund today to start building a legacy of impact right here at home.
*Deductions for contributions of long-term capital gain property (such as appreciated securities held for more than one year) are limited to 30% of AGI.