What we always hope for in life are win-win situations. Many times that is not the case or even possible! In the world of philanthropy we are looking for those times when a gift fills a need at your organization and is one the donor feels a sense of satisfaction about.
The best example of this is a QCD donation from an IRA. A Qualified Charitable Distribution (QCD) is a powerful tool that allows IRA owners to donate directly to qualified charities, bypassing the usual tax implications of IRA distributions. Transferring funds directly from your IRA to a charity allows you to exclude these distributions from your taxable income, resulting in significant savings compared to standard IRA distributions. QCDs can be counted toward satisfying your RMD for the year.
The beauty of QCDs lies in their simplicity and efficiency. For those aged 70½ or older, QCDs offer a way to meet required minimum distributions (RMDs) in a tax-efficient manner. Rather than taking a taxable distribution and then donating the funds—potentially pushing you into a higher tax bracket—a QCD enables you to give directly to the charity and avoid income tax altogether. The maximum amount that can be transferred through a QCD is $108,000 in 2025, offering a substantial potential impact on both your tax situation and the taxable amount related to the causes you care about, while also helping you manage your annual RMD.
Contributions made through QCDs do not count towards the thresholds for tax deductions on itemized deduction giving. This makes them a perfect option for those who want to make a significant charitable deduction impact without the complications of itemizing deductions on their tax return.
The benefit to the donor is that they can give to your organization directly, which lowers their tax burden. The benefit for you is that the donor feels good about using a method of giving in this way. Happy donors usually give more and more frequently!
The Giving Suite from LifeLegacy includes a QCD tool that helps the donor access the necessary paperwork quickly and easily. You have the ability to use this tool to encourage donors, usually around April 15th when donors are thinking about taxes and year end, to give in this rare win-win way!
Encouraging donors to give from their IRA is a creative way for a donor to give with impact and save on taxes. The impact is the same whether a donor gives from their bank account or their IRA. A QCD gift is a win-win!
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