When the Tax Cuts and Jobs Act (TCJA) passed in 2017, it nearly doubled the standard deduction. As a result, some charitably inclined individuals, who were suddenly on the fence between itemizing and taking the standard deduction, elected to enjoy the best of both worlds by taking advantage of a technique known as “bunching.”
Through bunching, a donor can condense two or more years’ worth of charitable giving into a single tax year to gain the maximum tax benefit.
OBBBA, which was signed into law on July 4, 2025, includes new floors on charitable deductions for itemizers—as well as C corporations—that will further increase the popularity of bunching as a tax strategy. That’s because, starting in the tax years beginning after December 31, 2025, itemizers will only earn a charitable deduction for giving in excess of 0.5 percent of their adjusted gross income (AGI), and C corporations will need to give at least 1 percent of their taxable income to qualify for a charitable deduction.
Itemizers and companies should consider maximizing giving in 2025 before these new provisions take effect.
DID YOU KNOW?
By bunching giving into a Donor Advised Fund (DAF), donors can contribute assets into a named account, get an immediate tax deduction, invest DAF assets tax-free, then suggest grants out of that fund gradually over time. This ensures that donors are able to continue to provide stable support to the nonprofits and causes they are passionate about, while maximizing tax savings.
Grants from DAFs at The Columbus Foundation can support any qualified public charity in the United States. Many of our funds support nonprofits in different states, including where donors grew up or have retired. In many cases, donors can even support nonprofits doing work internationally.
As always, The Columbus Foundation is here to make giving as effective and easy as possible. Contact us if you’re interested in learning how we can assist your clients in finding the most impactful and rewarding approach to charitable giving.
About The Columbus Foundation
The Columbus Foundation serves thousands of individuals, families, and businesses that have created unique funds and planned gifts to make a difference in the lives of others through the most effective philanthropy possible. The Columbus Foundation is Your Trusted Philanthropic Advisor and is one of the top 10 largest community foundations in the country.