Recently, I’ve starting submitting for the Q & A section in Planned Giving Tomorrow – Here’s my first submission….
We are looking at some RMD info related to Jane’s IRA account, and we are assuming that the school satisfies the QCD requirement, but just want to check.
Highly focused people (usually the successful ones) often miss the easy stuff in their focus on the bottom line: raising money now. The question above came to me via email from a top capital campaign consultant. He really knows his stuff. And yet, he had to ask me what RMD and QCD meant!
Do you know?
RMD is Required Minimum Distribution. That is an amount you are required (as an individual over age 70.5) to withdraw from your IRA and other qualified retirement accounts annually.
Why is this so important?
The IRA charitable rollover provision (which is, by the way, PERMANENT now if you hadn’t heard!) allows donors age 70.5 and older to give up to $100,000 to your charity directly from their IRAs. It doesn’t work for other retirement accounts—yet. It just so happens that the law allows donors to direct their RMDs (which would be fully taxable to them) to your charity without any taxes. This assumes your charity is QCD eligible.
You know that one, right? QCD means Qualified Charitable Distributions. If you are a regular charity – not a Donor Advised Fund or a Supporting Organization—you are more than likely QDC eligible. In a nutshell, using the charitable rollover provision gives donors an opportunity to support a cause they care about and avoid taxes on their RMD! Donors in this age range get this. You should, too, as these can be easy $100,000 gifts. Even if your donor has already taken their RMDs (which you can’t un-take), using an IRA to make a gift to charity is still a great idea. Talk it up with your donors!
If you have interesting questions that you wouldn’t mind being published in this blog and/or in Planned Giving Tomorrow, email your Q’s to me at firstname.lastname@example.org. And, check out Planned Giving Tomorrow by clicking here!