Some donor partners evaluate giving strategies on an annual basis, deciding how to give based on advantages that may change year to year. As we approach the end of the calendar year, many of the Community Foundation's partners are considering qualified charitable distributions (QCD) from their Individual Retirement Account (IRA). A tax-efficient way to give, QCDs continue to be popular!
Individuals 70 ½ or older may direct up to $105,000 from their traditional IRA to the causes that matter to them each year through a QCD. The gift amount, if given directly to an eligible charity, can be excluded from your gross income. These gifts are sometimes referred to as an “IRA charitable rollover.”
Making a distribution in two simple steps:
- Ask your IRA administrator to transfer IRA assets directly to the Community Foundation (if married, each spouse can transfer up to $105,000 each year).
- Choose where you’d like to direct your gift! We handle all administrative details. Gifts of any size can be made to an existing fund, including the Fund for Community Good to address the greatest community needs, or one of our Field of Interest Funds. You can also support a cause that is important to you by giving to support a Nonprofit Endowment or Scholarship fund. Unfortunately QCD contributions to Donor Advised funds are not permissible at this time.
Why is giving through a QCD efficient?
Giving through a QCD allows a donor to avoid income tax that would have been due on the amount withdrawn. The amount withdrawn is not only excluded from gross income on the Federal return, but is also excluded from Michigan income tax because it is not included in Federal adjusted gross income. Since there is no charitable deduction involved, the QCD is an incentive even for non-itemizers.
Please call our development team at 616.454.1751 if you have any questions. The Community Foundation also partners with trusted advisors who can assist in navigating your personal legal and financial situation. The full list of these professional advisors can be found at GRFoundation.org/Advisors.
Shaun is Major & Planned Gifts Director at Grand Rapids Community Foundation. He explores ways to introduce new donors to the Community Foundation through the creation of new funds and/or planned gifts. Shaun holds the CAP (Chartered Advisor In Philanthropy) designation from the American College of Financial Services and serves on the local boards of the Western Michigan Estate Planning Council, Western Michigan Planned Giving Group, and Rotary Club of Grand Rapids. Click here to learn more about Shaun.