Charitable Giving with an IRA

If you are 70 ½ and older, you can use your individual retirement account (IRA) to support your charitable giving through the Community Foundation. This simple, tax-wise tool provides a way to take your required minimum distribution, skip the tax and make meaningful gifts to support the causes you care about. 

Give During Retirement Years: Give to Nonprofits Through a Qualified Charitable Distribution (QCD)  

At age 73, annual withdrawals from your IRA are required by the IRS. However, there may be many reasons why someone may not want to have those withdrawals added to their total income. By having those withdrawals go toward one or more qualifying public nonprofits, individuals can avoid having the withdrawals go toward their total income for the year. This process allows assets to go directly to the nonprofit, so donors do not have to pay taxes on the assets when using a QCD. The assets given to the charities of your choice provide financial support for the charities to continue the impactful work they do in the community.  

Donor Advised Funds are excluded from this benefit, but you can direct your contribution to any of the nonprofits with funds at the Community Foundation at no cost. You can view the list here and reach out to our team to get started. 

You can also set up a Designated Fund through the Community Foundation to benefit up to four qualified charitable organizations. 

Utilize a Charitable Gift Annuity (CGA): 

Individuals age 70 ½ and older also now have the option to make a one-time QCD of up to $50,000 of IRA funds into a CGA. CGAs provide an opportunity to receive fixed annual payments for life with a plan in place to support the cause you care about after your lifetime.

Give Beyond Your Lifetime: Name Nonprofits of Your Choice or a Donor Advised Fund (DAF) as a Charitable Beneficiary 

Eligible nonprofits are ideal beneficiaries of IRA assets because they do not pay income tax on IRA income. In contrast, heirs who receive IRA assets will pay income taxes on the inherited assets at their own income tax rate at the time of withdrawal. If a nonprofit or DAF is named the beneficiary of an IRA, then all of the donation goes to the DAF or nonprofit, maximizing your impact. 

Interested in Learning More? 

The Community Foundation is here to work alongside you and your professional advisors as you write your charitable story. To learn about the benefits of a Community Foundation charitable giving fund or identify ways to give beyond your lifetime please contact our team.