Bunching: A Tax-Savvy Tool for Your Clients
By Marlo Turner, CFRE, Director of Gift Planning
Bunching: (verb) The technique a taxpayer uses to aggregate multiple years of charitable donations into one year to deliberately exceed the standard deduction.
Synonyms: bundling, front-loading
Limits on charitable deductions will tighten beginning in 2026, so this year, it is particularly important for your clients to consider bunching donations to maximize tax benefits and their impact. For 2025, the standard deduction is $15,750 for single filers and $31,500 for joint filers. So, if a couple typically gives $20,000 a year to support nonprofits, they could give $40,000 right now to take advantage of itemizing deductions. This is especially helpful to a client who is experiencing a relatively high-income year.
A donor-advised fund is an excellent way for your clients to receive the tax benefits of bunching while also maintaining a consistent level of support for the community. The Oklahoma City Community Foundation can work with you and your client to establish a donor-advised fund at OCCF, which can accept gifts of cash, appreciated stock, real estate and more. This allows your client to maximize tax savings, maintain consistent giving, avoid capital gains tax on appreciated assets and enjoy flexibility.
Here are a few ways your donors can “bunch”:
Give Cash
Cash is easy for a client to give in a year of surprise or higher-than-expected income. If your client earned a bonus, received a significant raise, took a job buyout or had a significant liquidity event, surplus income could make bunching an ideal option. Keep an eye out for clients who may be in these situations so you can open up the conversation.
Appreciated stock
Donating highly appreciated marketable securities is extremely tax-efficient. Stock given to a public charity typically is deductible at the asset’s fair market value. The charity, in turn, pays no capital gains tax on its sale of the assets, thereby generating more dollars to support the organization than you would have received if the client had sold the stock and given the proceeds to charity. Yes, the benefits of giving highly appreciated stock are second nature to those of us who work in philanthropy every day, but your clients may not be aware, and it is truly worth it to always mention this giving technique.
Real estate
As with gifts of other long-term appreciated assets, a client’s gift of real estate avoids capital gains taxes and generates more money than if the client had sold the property and donated the proceeds. Reach out to our team for assistance when your client would like to use a gift of real estate. We can help!
If you have any questions about how OCCF works with donors through donor-advised funds and other vehicles to support causes they care about, please ask. We invite you to reach out, and we look forward to the conversation.
The expert team at the Oklahoma City Community Foundation serves as a charitable giving resource to enhance the knowledgeable service you give your clients. We’ll help you structure a giving plan that maximizes tax advantages while achieving your clients’ charitable and financial goals. This newsletter is provided for informational purposes only. It is not intended as legal, accounting or financial planning advice.