For your charitably-inclined clients who are 70 ½ and older, we simply cannot emphasize enough the benefits of a tool known as a Qualified Charitable Distribution, or “QCD.” A QCD allows your client to donate money directly from an IRA to certain types of funds at the community foundation, including a designated fund to support a specific charity (or charities) or a field-of-interest fund to support a particular community cause. Each client can donate up to $105,000 through a QCD this year, and that limit will be indexed for inflation going forward. This means that in 2024, a married couple can transfer up to $210,000 from IRAs to causes they care about.

Here are important reminders about QCDs, especially as year-end approaches:

• Please reach out to the community foundation to start the conversation sooner rather than later. While QCDs are a relatively easy and tax-effective giving strategy, there are still important steps and paperwork that must be handled correctly and it’s better not to rush.
• Note that a donor-advised fund is not an eligible recipient of a QCD. The community foundation is happy to work with your clients to establish a designated fund or field-of-interest fund to receive the IRA distribution. Your client may also want to consider making an unrestricted gift to the community foundation’s endowment through a QCD to support the community foundation’s work over the long term.
• Remember that QCDs count toward Required Minimum Distributions (“RMDs”) for clients who have reached age 73.
• Help your clients with the appropriate reporting for their QCDs. The community foundation will provide a receipt for the donation, but you and your client’s other advisors can remind a client to reflect it correctly on the client’s income tax return, even if the client does not itemize deductions.

We look forward to talking with you soon about how we can help your clients achieve their year-end charitable giving and tax goals through QCDs and beyond!