The QCD of it All
Connecting the Dots for Strategic Philanthropy at Triangle Community Foundation
By Deirdre Gordon, Vice President of Philanthropic Engagement
Different stages of life open up new opportunities for generous people to support causes they care about in both meaningful and strategic ways. One important stage begins at age 70 ½, when an IRA (individual retirement account) presents an opportunity to move charitable dollars via a QCD (qualified charitable distribution).
How does a QCD provide new opportunities for strategic philanthropy?
Here at Triangle Community Foundation, using a QCD mobilizes giving to meet your most important philanthropic goals. You can make a QCD to the Foundation in three different, yet each strategic, ways:
- Supporting Fund for the Triangle – with an unrestricted gift to the Fund, you’ll support grants across our impact areas in our four-county region developing partnerships with strong nonprofits doing critical work. The benefit to making an unrestricted gift to the Fund is knowing that it will be utilized when and where it is needed most. This means that a gift made today may be used for a critical need in our community right now, or it may not be used until an upcoming impact area grant cycle.
IRA Giving
Using a QCD - defined as a nontaxable distribution made directly by the trustee of an IRA to organizations that are eligible to receive tax-deductible contributions - is a tax smart way to make a gift without raising income once you are mandated (starting at age 70 1/2) to meet a required minimum distribution (RMD). Because the article does not construe tax advice, you can find full details about reducing your tax burden by using a QCD on this irs.gov webpage. Note there are annual limits to the dollar amounts and timing considerations for a QCD each year, so always consult your tax professional as you make decisions.
- Contributing to or creating a Field-of-Interest Fund – this is a “set it and forget it” option, though broader in scope to support organizations in a particular field (e.g. arts & culture). The Foundation has existing field-of-interest funds that you can grow with a QCD, or you can establish a fund in a field meaningful to you. Once a field-of-interest fund is established, grants will be made to that philanthropic interest area over the life of the fund.
- Creating a Designated Fund – another “set it and forget it” fund allows you to designate up to four nonprofits of your choosing to receive annual distributions of a set percentage of that fund. This creates stable, ongoing funding for the designated charity. While you can make annual contributions to the fund to grow the fund over time, over the life of the fund the nonprofit designations and corresponding contribution percentages are fixed.
Of note is that establishing a field-of-interest or designated fund with a QCD during your lifetime starts the flow of charitable assets now and creates a pathway for planned gifts through your estate or other contributions after your lifetime. This is yet another aspect of strategic philanthropy which can help you be generous both now and in the future.
If you are interested in discussing options for a QCD, please email us at [email protected]. Our dedicated staff is ready to assist as you work to make more possible through your strategic philanthropy.
Please note: under IRS rules at the time of this writing, individuals may not transfer a QCD to a donor-advised fund (DAF).
Not sure how or if the above applies to you? Contact your professional advisor (CPA, lawyer, financial advisor) to learn more.
The information above is not intended to constitute tax or legal advice and should not be relied upon as such. You should discuss the implications and consequences of a specific charitable gift with a legal and/or tax advisor who is familiar with your financial situation.