Though Planned Giving tools can feel a little overwhelming, especially for small and mid-size nonprofits, they can be a powerful part of the fundraising strategy. For organizations that don’t have much experience with planned giving, it’s a good idea to start small – but to start somewhere. A good start can be suggesting an IRA charitable rollover, also known as a qualified charitable distribution (QCD).
What Is an IRA Rollover?
An IRA rollover allows individuals who are 70½ or older to transfer funds directly from their Individual Retirement Account (IRA) to a qualified charitable organization, without counting the distribution as taxable income. Donors can give up to $100,000 annually in this way.
This type of gift is especially appealing for donors who are required to take minimum distributions (RMDs) each year but don’t need the additional income. By making a qualified charitable distribution, they can fulfill all or part of their RMD while supporting causes they care about.
Why Should Nonprofits Care?
- Unlocks Larger Gifts: Since the distribution comes from retirement assets—not cash flow—donors may feel more comfortable making larger contributions.
- Tax-Savvy Giving: Many donors are looking for ways to give that reduce their tax burden. IRA rollovers offer an attractive solution.
- Engages a Key Donor Demographic: Donors over 70½ are often among a nonprofit’s most loyal supporters. Offering them this option strengthens those relationships.
- Low Barrier to Giving: The process is straightforward for donors, often requiring just a request form to their IRA custodian.
How Can Nonprofits Take Action?
- Educate Your Donors: Share information about IRA rollovers in newsletters, on your website, and during one-on-one conversations with donors nearing or over age 70.
- Highlight Impact Stories: Showcase examples of how IRA rollover gifts have made a difference (with donor permission).
- Make It Easy: Provide clear instructions and a sample letter for donors to give to their financial institutions.
By promoting IRA rollovers, nonprofits can tap into a powerful giving tool that helps supporters make a significant difference in a mutually beneficial way.
If you would like to learn more about Planned Giving and how it could help your organization, reach out to us.