Charitable IRA Rollovers Set to Expire! Talk it up now.

We have known this all year long:  the 2010 tax relief act only extended the Charitable IRA Rollover provision (direct giving from IRAs for 70.5 year olds for up to $100k) until December 31, 2011.

There is no guarantee it will be extended; most likely won’t even be addressed until later into 2012.

Actually, this is good news for major gift fundraisers and planned giving programs. Don’t forget to let your donors and prospects know that their chances of using this very helpful provision are soon to end.  Deadlines are always great incentives to act – just get out the word that this opportunity is expiring (at least for now).

Here are the relevate points to remember about the Charitable IRA Rollover provision:

  • It only applies to donors who have actually reached age 70.5 (not those who are about to turn 70.5 this year – they have to wait until they reach the magic date to request the transfer!);
  • It only applies to standard IRA accounts (it technically works with Roths, too, but you should advise your donors against using Roths for this purpose);
  • It only allows eligible individuals to send $100,000 in total to qualified nonprofits in a year (if exceeded, the IRS would have to tax any gifts over the limit);
  • It DOES count against your donors’ Required Minimum Distributions (RMDs) so this is clearly a chance for individuals to avoid income taxes on not needed RMDs.
  • The IRA funds must go directly to the nonprofit (IRA custodians should have forms for this purpose);
  • Donors don’t receive a new tax deduction – rather, the fact that they are not paying income taxes on the “withdrawal” is actually better than a standard charitable deduction.  Toss in that it counts for RMD purposes, it is really a great opportunity for tax savings and significant gifts to charity.

With the President running around the country touting his Jobs thing (which happens to damages charities by messing with itemized deductions for high net income earners), and the Republicans also getting into full campaign mode (with the focus on unseating the President), I can confidently say the Charitable IRA Rollover is in serious jeopordy.  At least for 2012.

So, use or lose it (at least that is the sell fundraisers should be putting out there before the end of the year).


  1. This opportunity is the subject of our Q4 print newsletter “ad,” even though planned giving group does not receive credit for any funds received (no issue, as we have already met our annual goal for the year). We should probably also do an e-blast to donors who we believe are age-qualified. Like most places I am aware of, while we got a few $100,000 transfers, most were smaller and several were in the amount of the donor’s RMD, especially for those who are just now retired or are still working and do not seem to need the funds.

  2. This is very helpful. Thank you.

    Are there any statistics as to how much money was raised last year via the charitable rollover (throughout the philanthropic world)?

    1. I am looking but not finding anything. From what I hear, anecdotally of course, the numbers are not all that impressive. Most report only a small number of them but it would be nice to hear what really happened across the board.

      Thanks for commenting!

  3. After checking out a few of the articles on your blog, I seriously appreciate your way of blogging. I bookmarked it to my bookmark website list and will be checking back in the near future. Take a look at my web site as well and tell me what you think. I agree there is no guarantee it will be extended and I think its true that most likely won’t even be addressed until later into 2012.

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