With a technique known as gift bunching, you can maintain your charitable impact while realizing potential tax benefits.
Many donors choose donor advised funds (called DAFs for short) as a flexible and efficient way to organize charitable giving.
With a DAF, you receive a potential tax deduction each year you give to your fund and then decide how to direct the funds over time, so you can support multiple nonprofits.
When you pair your DAF with a technique known as gift bunching, you can sustain your charitable impact while potentially maximizing your tax benefits.
Our Senior Vice President of Philanthropic Services, Jeremy Wells, explains the advantages of gift bunching in this video.
In the video, a donor clusters - or bunches - three years’ worth of charitable giving in one year into their DAF and takes the charitable deduction on their taxes that year. This allows them to itemize deductions.
They then recommend grants out of their DAF to the community causes they support over time. The donor takes the standard deduction in those years where they aren’t adding to their donor advised fund.
If you’d like to learn more about making the most impact with your charitable giving, please reach out to our Philanthropic Services team.
Answers to the following six questions will determine if a donor advised fund may be right for you.Learn More
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