“Bundling” is the term we use when a donor deposits multiple years’ worth of charitable assets into a Donor Advised Fund in order to build up the amount of their tax deductions. The donor gets a tax receipt from us for the full amount and then can grant out smaller amounts each year to equal what they normally had given out each year before the updates to the federal tax laws.
DAFs have always had this advantage: deposit a large sum now, take the deduction, and grant out at your leisure. To learn more about the types of donor-designed funds that we offer, including DAFs, please visit https://www.cfgrundycounty.com
To see how bundling works, please see the illustration below. So far we’ve had a few donors take advantage of this strategy. Please consult with your tax professional – it might be an advantage for you, too!!
The CARES Act has a few temporary tax advantages relating to charitable giving:
If you DO NOT itemize, you can donate $300 CASH for an above-the-line deduction for qualified charitable contributions. For now, this is only for 2020. Please note: this is per tax return, not per spouse. $300 doesn’t seem like much, but to some nonprofits who serve Grundy County, a new $300 donation can make a world of difference. Please consider it!
If you DO itemize, the CARES Act temporarily modifies the contribution limits for individuals and allows individuals to deduct qualified charitable contributions up to 100% of their AGI (up from 60%). The excess contributions will be carried forward for the next five years. These changes only apply to cash contributions, again excluding Donor Advised Funds, but other Fund types here at the Foundation are eligible. Stock donations and gifts to private foundations are still subject to the 30% of AGI rule.
Holiday office hours
It’s not too late to beat the tax year deadline! We are closed December 24, 25, 31, and January 1, but we are open December 30th until 4:00 pm. It takes just minutes to create a Fund Establishing Document. You sign it, write a check, and you’ve beaten the deadline!
This season of giving is a great time to do what you can…with what you’ve got…where you are. We hope you enjoy this season of giving among your family, friends, co-workers, charities, and community.
From our Board of Trustees, committee volunteers, and staff: Merry Christmas and a Happy New Year!