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The Community Foundation Blog


Is IRA Charitable Giving Right for You?
By The Community Foundation / May 6, 2021
Is IRA Charitable Giving Right for You?

By Amy Singleton, Vice President of Philanthropic Services

In her role, Amy works with individuals, families and businesses to create funds that help achieve their philanthropic goals. She also meets with current donors who have established funds at the Foundation to share information about community initiatives and ways to engage with the Foundation to create a more vibrant region.  

Throughout my career at the Foundation, I've worked with many donors and families who have utilized savvy giving strategies, and one strategy that has become increasingly popular is charitable giving through an IRA.  


How IRA Charitable Giving Works 

Ordinarily, individuals who are 70 ½ and older must begin making Required Minimum Distributions (RMD) from their IRA every year, and these distributions are considered taxable income. However, using an IRA to fund a Qualified Charitable Distribution (QCD) can be a useful way to extend your philanthropic giving. You may choose to annually transfer up to $100,000 from an IRA directly to a qualifying nonprofit using a QCD, and at age 72, a QCD may satisfy applicable RMD requirements — allowing you to give more to favorite charities and possibly reduce income taxes.  

While QCDs cannot be used to establish or add to a donor advised fund, the Community Foundation stewards several other fund types that can be used to facilitate giving through an IRA, depending on your interests.


Field of Interest Funds

By giving to a field of interest fund, you can focus your giving on a particular subject area like education or health care, or a specific geographic area. One donor couple we’ve worked with is especially interested in supporting the arts through their giving, so they use distributions from their IRA to support the Fund for Community Vibrancy, from which the Community Foundation makes grants each year to support our region’s arts and cultural activities. This couple knows that the Community Foundation has extensive knowledge of the local organizations doing good work in the arts and will ensure that their dollars make the most impact.  

Designated Funds

Establishing a designated fund is a great way for donors to support specific organizations. To support her favorite nonprofits during her lifetime and in perpetuity, one of our donors has used her IRA distributions to establish a designated fund supporting these organizations — and now, she doesn’t have to remember to write annual checks to these nonprofits because her fund makes annual grants for her.


Community Impact Fund

For donors interested in supporting our region’s most urgent needs, donating to an unrestricted fund such as our Community Impact Fund is most popular. One donor family contributes a portion of their grantmaking each year to our Community Impact Fund, bolstering the Foundation’s ability to make annual strategic grants to nonprofits supporting projects and programs in our four focus areas: Health and Wellness, Economic Prosperity, Educational Success and Community Vibrancy.

The Community Foundation has experience helping individuals and families navigate giving through an IRA to best meet their philanthropic goals. If you are interested in learning more, please reach out to your Philanthropic Advisor.  

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