IRA

Q & A in Planned Giving Tomorrow – IRAs, RMDs, and QCDs – Familiar with these?

Image result for q & aRecently, I’ve starting submitting for the Q & A section in Planned Giving Tomorrow – Here’s my first submission….

QUESTION

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.

ANSWER

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 jonathan@plannedgivingadvisors.com.  And, check out Planned Giving Tomorrow by clicking here!

DON’T FORGET TO CHECK OUT OUR SUMMER LINE-UP OF WEBINAR PROGRAMS!

Planned Giving in 2017?

Image result for planned giving

I refuse to jump to any conclusions regarding this year in planned giving (or any year!).

Will Congress/President somehow waterdown or eliminate the charitable deduction?

Possibly but it’s possible that the charitable deduction will be more valuable to your donors than ever before if they limit other deductions but not the charitable one.  (Treasury Secretary Mnuchin already said there will be no tampering with the charitable deduction contrary to Trump’s campaign “tax plan”)

Will there be anything new and exciting for fundraisers to bring to donors?

This doesn’t look like a great year for creative charitable legislation. Let’s see if they really “fix” Obamacare or the tax code.

But, there are a few things I can guarantee will happen: the oldest baby-boomers start turning age 71 this year, the age when required minimum distributions (RMDs) from IRAs and other qualified retirement accounts start.  There are a lot more boomers than their predecessors, with a lot more IRA funds – IRA charitable rollovers and beneficiary designations should be high on every fundraiser’s wish list.

Bottom line: Planned Giving is turning a corner, Boomers are finally and officially Planned Giving Prospects. Maybe it’s time you and/or your organization realized that it is “now or never” for the Boomers? Train up the staff, invest in the Planned Giving program.

Oh, and check out our 3-part Planned Giving Boot Camp for Major Gift Officers! Next sessions start March 15, 2017 – click here to see how affordable it is to train up to 15 staff members in planned giving!

IRA Law Passes! Permanently!!

The IRA giving provision is on the books again!  Hooray!

Now what?

It is December 21st. Friday is Christmas (that rules out Thursday, too, and even this entire week for many).  New Year’s Eve is the following Thursday.  So, we have 6.5 business days, give or take, to do something this year about it.

Some of my colleagues have had a mailing ready to go that maybe, just maybe went in the mail today.  Problem with this strategy is that the mail is really slow this time of year – trust me, I am waiting for a check from a client 20 miles from my home that went out on Wednesday last week and I am still waiting!  Anyway, your donor needs to somehow get the IRA plan administrator to disburse the funds in 2015 to count for 2015 (no big deal if it misses).  No, in my mind, an attempt at a mailing doesn’t make sense.

What about an email blast?  Yes, go for it!  Big headline:  IRA Giving Provision Reinstated!  Big message:  Contact your IRA plan administrator about taking advantage of this year-end giving option for a tax-free gift from your IRA to ______ charity.  Bullet points:  If you are age 70 1/2 or older; You can gift up to $100,000 from  your IRA with no taxable income; Call us now for more information or contact your IRA plan administrator to find out how to take advantage of this law before December 31th.

Even better, get on the phone or personalized emails!  You should be calling anyone who not only had a recent interest in IRA giving, but anyone who ever used the provision in the past!  Talking points:  did you know that Congress just passed the law the allows you to make direct gifts to us from your IRA with no tax consequence?  If you haven’t taken your 2015 RMDs yet, an IRA rollover gift counts towards your RMD.

Beyond this year?  The law is now permanent!  Like I said – hooray!  Why am I so excited?  It just happens that the oldest baby-boomers (those born in 1946) will start turning 70.5 this year!  Oh, and did you know that for boomers, IRAs are the biggest asset class among their financial investments, by far?  Will share that data another time – just realize that IRAs for boomers are big and now boomers will start being eligible to make gifts from their IRA to cover their RMDs, for annual giving, for special or major gifts.

Don’t forget that a donor needs to have actually reached his/her 70.5 birthday before pulling the trigger on this.  The IRS, in their accountant’s way of viewing the world, actually count your half-birthday as the day you actually turn the next age.  Yep, if you are than 50% through the  year since your last birthday, you can start telling everyone that according to the IRS, you are already a year older’).

 

 

 

IRA Giving Getting Closer (and Possibly Permanent!)

ppp screen shot

Thank you PPP for your announcement  – click the picture to see it.  Yes, we are inching towards an IRA giving law again but this time it looks like it will be for good (i.e. no longer up for grabs each year).

This is great news.  Sure, you have almost no time to reach your donors this year – we will be lucky if we know for sure by Friday.  But, we can get a jump on next year and beyond, and maybe get a few gifts in by year’s end.

Why I am so encouraged is that the oldest baby boomers are just starting to turn 70 in 2016 and they are prime candidates for this giving option so the fact that the law should become permanent is great news.

My planned giving boot camp students asked what are the immediate next steps (AS SOON AS IT IS SIGNED INTO LAW)?

  • Call/email anyone you know who has used the IRA giving provision in the past!
  • Email blast away!  Time sensitive headline – act by December 31 to make your tax-free IRA gifts!
  • Even if these efforts are a little late, they will certainly help for next year and beyond.
  • Start planning a post card or newsletter or more email blast or ads in your publications – anything to catch people’s attention and open their eyes to this nifty new way of giving (if they are the right age, of course!)