Is Bunching in Your Future?

Oct 9, 2025 Ryan Douglas, Senior Charitable Giving Advisor

The new federal legislation signed on July 4, 2025, may reshape and have ripple effects across the landscape of charitable giving for individuals and corporations. We’ve highlighted some of the challenges and offered potential planning opportunities, including a strategy called bunching. Bunching refers to concentrating several years' worth of your charitable contributions into one year, itemizing deductions that year to benefit from extra tax savings.

For Individuals

As part of this new federal legislation, two provisions individuals and families should keep in mind when it comes to charitable planning are:

1.     Higher Standard Deduction
Currently, the standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly. This standard deduction will be extended and indexed for inflation in the future.

a.     Why does this matter? With the higher standard deduction in place since 2017, over 90% of tax filers are now utilizing the standard deduction. For this group, charitable donations are not able to receive a tax deduction.

2.     Giving Threshold for Itemizers 
Beginning January 1, 2026, for individual taxpayers who itemize deductions, federal legislation now includes a 0.5% charitable floor, meaning only contributions exceeding 0.5% of their adjusted gross income are tax-deductible.

a.     Why does this matter? Individuals and families will only receive a tax deduction on donations in excess of this new threshold.

Planning Opportunity: Donors can “bunch” charitable contributions into a personalized Donor Advised Fund (DAF) in one calendar year, ensuring they will have enough charitable donations to exceed the standard deduction and the new 0.5% giving threshold. Donors can then advise when and where to distribute the dollars in their DAF over time, so the causes and communities they love can receive their generous support now and in the future. Click here to learn more about bunching.

For Corporations

C-Corporations face similar challenges as described above. As part of the new tax legislation, here is a provision corporations should keep in mind when it comes to charitable planning:

1.     Corporations Required to Give More to Keep Their Deductions 
Beginning January 1, 2026, the new law requires corporations to donate at least 1.0% of their taxable income to qualified charities to be eligible for charitable deductions.  

a.     Why does this matter? Corporations will only receive a tax deduction on donations in excess of this new threshold.

Planning Opportunity: Corporations can “bunch” charitable contributions into a customized Committee Advised Fund (CAF) in one calendar year, ensuring they will have enough charitable donations to exceed the new 1.0% giving threshold. Corporate leadership can then advise when and where to distribute the dollars in their CAF over time, so the causes and communities that align with their company’s giving values can receive their generous support now and in the future. Click here to learn more about bunching.

Additional Opportunity to Use Noncash Assets

Another popular reason to bunch charitable giving is the ability to use noncash assets to maximize tax savings. Many donors grab their checkbook when giving to nonprofits, but there may be other assets already in your portfolio that offer more tax-wise giving opportunities including:

  • Appreciated securities
  • Privately-held or closely-held business interests
  • Grain or livestock
  • Real estate
  • And more.

There are many reasons bunching charitable giving may be an attractive giving strategy. To take advantage of this highly personal approach to meeting your giving goals in tax-wise ways, we suggest speaking with your trusted professional advisor and connecting with our team at the Community Foundation to learn more.