Clumping Donations
July 20, 2009 – 6:53 am
I’m a relatively patient person, but I was not able to wait to get Spend Til’ The End from my local library. In my defense I did request it from the library, but they didn’t have many copies and I was put in queue behind 50+ other people. I waited a while, but then I decided to use a Christmas gift card to buy the book. 
Rather than writing a complete review of the book which other bloggers have already done, I’m going to discuss a couple of topics I found most interesting. I found this book to be very well written and full of thought-provoking ideas.
The topic I’d like to cover today was called “Clumping” in Spend ’til The End. The concept hinges on the fact that most households don’t itemize their deductions on their tax returns because their itemized deductions don’t surpass the standard deduction ($10,900 for a married couple filing jointly in 2008). The idea proposed is to (if possible) group or “clump” your expected giving together from 2 or more years so that, when combined, you can actually write off your giving. This is easiest if you plan to continue giving in retirement, because you will (hopefully) have the funds available at that time to give a substantial sum at a single point in time.
Like most tax planning tactics, this is a timing issue. You’re grouping together write-offs into a single year so that you can take advantage of the tax laws and available write-offs.
On a related topic, I’m not quite sure how I feel about this idea with respect to the tithe, which is supposed to be given from your “first fruits.” I suppose even if I was able to give in advance by pulling from savings this still probably isn’t what God intended with the tithe, even if I could save quite a bit on taxes. Thoughts?
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One Response to “Clumping Donations”
This is something I’ve posted about before on my blog and we have done this now for several years. We will have piles of stuff for Goodwill that just sits in a corner for months until the calendar changes over and the donation is worth something tax-wise again. Remember that you can do this with property taxes and any other controllable deductible expense as well.
With regards to your question about this tactic and the law of the tithe, I guess this will depend on your personal beliefs and any guidance available from your church leaders. Our family is LDS and we discuss this with our bishop every year just to make sure we don’t get any odd looks when we tell him we are full-tithe payers in our “off” years. We simply pay out of our savings what we expect to tithe in the coming year sometime in late December, and we have never had any of our leaders say anything negative and have had two tell us they do the same. You just have to make sure to go back at the end of the year to reconcile and make sure you did pay what you should have.
By BillyOceansEleven on Jul 20, 2009