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Gift Bunching – or a Better Idea?

You’re going to hear a lot about “bunching” in the weeks ahead.

The standard federal income tax deduction has been raised for 2018 to $12,000 for individuals and to $24,000 for joint filers.  There is a new limit on the mortgage interest deduction.  Wealthy donors whose deductions for property and local taxes, plus medical expenses are close to the standard deduction are looking for ways to boost the deductions they can claim this year.

Tax advisors are suggesting “bunching” the next few years of charitable giving into one gift this year to a donor-advised fund (DAF) and benefiting from the large deduction it would permit, as this Chicago Tribune article points out: https://trib.in/2xVbGLF

But it raises the question, if donors are looking for a large charitable gift deduction this calendar year, why not suggest an impactful and emotionally compelling gift idea to them – right now?

I think that donors deciding between a gift to a boring DAF and a gift to your organization, with the immediate satisfaction that gift can provide, you stand a pretty good chance.

Of course, it presumes two things.  One, that your organization has given you 2-3-4 projects to sell that can spark that interest.  And two, that you make the ask.

The Tribune article also does a commendable job of reviewing what I call my Charitable Big Three:  using appreciated stock, a donor-advised fund, and the Required Minimum Distribution from an IRA as very donor-friendly gift vehicles.

Your website, in more than one place, should be gently reminding your donors that you welcome all Three.

Time’s a’wasting.  Any donor who is looking to “bunch” gifts this year into a donor-advised fund for the tax deduction can achieve exactly the same thing by making a big outright gift to you.

And have way more fun doing so.

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