Is the Charitable IRA Gift a Good Fit for You?

How do you know if the Charitable IRA Gift is a good fit for your philanthropic intentions and financial situation? This simple yes-or-no questionnaire can help you find out.

1. Do you have a nonprofit such as Silver Cross Hospital or particular cause that you care deeply about?
2. Do you wish to leave a charitable gift through your estate plan?
3. Have you used beneficiary designations to gift retirement assets to your favorite charities?
4. Are you making annual charitable gifts, but taking the standard deduction on your tax return, or do your other itemized deductions add up to less than the standard deduction amount?
5. Does taking IRA distributions bump up the tax percentage you pay on your social security benefits?
6. Do you have more than you’ll ever need in your retirement and investment accounts?
7. Are you taking the required minimum distributions (RMDs) from your IRA, but really don’t need them?
8. Have you ever wanted to benefit your community with a funding stream that lasts for generations?
9. Do you want to make the biggest impact with your gift?

If you answered yes to any one of these questions, a gift through your Retirement Plan or a Qualified Charitable Distribution (QCD) from your Retirement Plan might be just what you’re looking for! Of course, you should always consult with your estate attorney and financial advisor(s) to determine which charitable giving option makes the best sense for you.

Example:

John is 73 and wants to contribute $20,000 to the Silver Cross Foundation – the 501c3 fundraising arm for Silver Cross Hospital.  He has somewhat over $500,000 in his IRA, and his minimum required distribution would be about $20,000. He can authorize the administrator of his IRA to transfer $20,000 directly to the Silver Cross Foundation in a "qualified charitable distribution" or QCD. John will not be eligible for a charitable income tax deduction, but because the entire amount of the QCD is excluded from income, he still receives tax savings. The $20,000 distributed to the Silver Cross Foundation will be counted toward his annual required minimum distribution (RMD), and he will not pay income tax on the portion given to charity.

Note: 73 is the age when required to take out the RMD. The earliest age John can withdraw voluntarily from his retirement is 59.5. And the earliest he can make a QCD is 70.5.  These numbers can get confusing because if John is between 70.5 and 73, he can still make a QCD but will not enjoy the tax advantage if he is not taking out a distribution.

Using the IRA Charitable Rollover is a simple, meaningful and tax-efficient way to support a mission you believe in – improving the health of those Silver Cross Hospital serves and advancing wellness our community.

The distribution must be made by the administrator of your IRA. you can download a sample letter of instruction here.

For more information, please feel free to contact Tracy Simons at (815) 300-7113 or tsimons@silvercross.org.

IRA administrators don’t always include the donors’ names on distribution checks. If you’re planning to make a distribution to the Silver Cross Foundation from your IRA, please let us know in advance so we’ll be able to identify your gift. Also let us know if you want your gift used for a particular purpose. Thank you!