Charitable Bunching
Charitable Bunching
A tax efficient strategy that leverages a Donor-Advised Fund to reduce taxable income while leaving clients with more money to support causes they care about over time.
A tax efficient strategy that leverages a Donor-Advised Fund to reduce taxable income while leaving clients with more money to support causes they care about over time.
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OUR PROCESS
How it Works
How it Works
Charitable bunching is a strategy that separates the timing of tax-deduction from the timing of when the grants will be made.
Charitable bunching is a strategy that separates the timing of tax-deduction from the timing of when the grants will be made.
1
Front-Load Contributions
Front-loads multiple years-worth of
charitable contributions to a DAF in
a single year.
2
Itemized Deductions
Claim an itemized deduction,
capitalizing on the larger charitable
contribution.
3
Distribute Funds
Distribute money to charity over
time while claiming the standard
deduction in subsequent years.
USE CASES
When is Charitable Bunching
a Good Fit?
01
Consistent Giving
When Donors consistently engage in charitable giving every year.
02
One-Off Income
When Donors received a large amount of one-off taxable income in a given year.
CASE STUDY
Without Charitable Bunching
Without Charitable Bunching
A married couple donates $10,000 per year to several different charities. The couple itemizes their taxes each year, using their $10,000 yearly donation to add to their deduction.
Years 1-5 Without Charitable Bunching
Donation
$10,000
State and Local Taxes
+$10,000
Mortgage Interest
+$8,000
Total Yearly Itemized Deduction
=$28,000
Standard Deductable
-$27,700
Additional Deduction
=$300
Total Donations Over 5 Years
Total Donations Over 5 Years
$50,000
$50,000
Tax Deduction Over 5 Years
Tax Deduction Over 5 Years
$140,000
$140,000
CASE STUDY
With Charitable Bunching
With Charitable Bunching
A married couple donates $10,000 per year to several different charities. With charitable bunching, the donor is going to contribute $50,000 in year 1 to their DAF. Each year they will grant $10,000 to the causes they support.
1 Year With Charitable Bunching
Donation
$50,000
State and Local Taxes
+$10,000
Mortgage Interest
+$8,000
Total Yearly Itemized Deduction
=$68,000
Standard Deductable
-$27,700
Additional Deduction
=$40,300
Years 2-5 With Charitable Bunching
Donation
$27,700
State and Local Taxes
$110,000
Total Donations Over 5 Years
Total Donations Over 5 Years
$50,000
$50,000
Tax Deduction Over 5 Years
Tax Deduction Over 5 Years
$178,000
$178,000
CASE STUDY
With Charitable Bunching
A married couple donates $10,000 per year to several different charities. With charitable bunching, the donor is going to contribute $50,000 in year 1 to their DAF. Each year they will grant $10,000 to the causes they support.
CASE STUDY
Years 1 With Charitable Bunching
Donation
$50,000
State and Local Taxes
+$10,000
Mortgage Interest
+$8,000
Total Yearly Itemized Deduction
=$68,000
Standard Deductable
-$27,700
Additional Deduction
=$40,300
The donor can then claim the standard tax deduction for years 2-5.
Years 2-5 With Charitable Bunching
Donation
$27,700
State and Local Taxes
$110,000
Total donations over 5 years: $50,000
Total tax deduction over 5 years: $178,000
Without Charitable Bunching
A married couple donates $10,000 per year to several different charities. The couple itemizes their taxes each year, using their $10,000 yearly donation to add to their deduction.
Years 1-5 Without Charitable Bunching
Donation
$10,000
State and Local Taxes
+$10,000
Mortgage Interest
+$8,000
Total Yearly Itemized Deduction
=$28,000
Standard Deductable
-$27,700
Additional Deduction
=$300
Total donations over 5 years: $50,000
Total tax deduction over 5 years: $140,000
CASE STUDY
01
Consistent Giving
When Donors consistently engage in charitable giving every year.
02
One-Off Income
When Donors received a large amount of one-off taxable income in a given year.
Charitable
Bunching
A tax efficient strategy that leverages DAFs to reduce taxable income while leaving clients with more money to support causes they care about.
When is Charitable Bunching
a Good Fit?
USE CASES
01
Consistent Giving
When Donors consistently engage in charitable giving every year.
02
One-Off Income
When Donors received a large amount of one-off taxable income in a given year.
How it Works
OUR PROCESS
Enjoy customizable lists, team work tools, and smart tracking all in one place. Set tasks, get reminders, and see your progress simply and quickly.
When is Charitable
Bunching a Good Fit?
USE CASES
1
Front-Load
Contributions
Front-loads multiple years-
worth of charitable
contributions to a DAF in
a single year.
2
Itemized
Deductions
Claim an itemized deduction,
capitalizing on the larger
charitable contribution.
3
Distribute
Funds
Distribute money to charity
overtime while claiming the
standard deduction in
subsequent years.
1
Front-Load Contributions
Front-loads multiple years-worth of
charitable contributions to a DAF in
a single year.
2
Itemized Deductions
Claim an itemized deduction,
capitalizing on the larger charitable
contribution.
3
Distribute Funds
Distribute money to charity over
time while claiming the standard
deduction in subsequent years.