If you are fortunate enough to have more saved in your IRA than you need, charitable giving from your IRA is a great option to explore. The Community Foundation has been helping donors plan charitable giving from their IRA since the provision was first enacted in 2006.

Each year, donors work with the Community Foundation to facilitate giving back from their IRA through a Qualified Charitable Distribution (QCD). Just last year, donors gifted nearly $400,000 from their IRAs to support endowment funds, nonprofits like Old Newsboys, the YMCA, Blue Water Safe Horizons, or their church. Donors have also started funds to build up their charitable giving over time to support an organization they care about or a field of interest, like arts and culture or education.

Ken Wakeen, a former newsboy for the Times Herald, created a designated fund for the Port Huron Old Newsboys with a gift from his IRA. “My goal and purpose is to, in some small way, pay back the community—hopefully for those in real need—for a special opportunity I was given by the old Times Herald over 50 years ago,” said Ken.

Making a charitable gift from your IRA can be both tax-advantageous and fulfilling. It’s a win-win for supporting a cause you love or the community you love.

Below is a quick list of benefits of giving from your IRA to help you plan your best options:

1. Tax Benefits

• Avoidance of Income Tax: When you transfer funds directly from your IRA to a qualified charity, the distribution is not included in your taxable income. This is especially beneficial if you do not itemize deductions or if the additional income would push you into a higher tax bracket.
• Required Minimum Distribution (RMD) Satisfaction: For those over 72 years old, QCDs can count toward satisfying your RMDs for the year, helping to manage your taxable income.
• Annual Limit: You can give up to $100,000 per year from your IRA without it being included in your taxable income.

2. Simplicity and Convenience

• Streamlined Giving: The Community Foundation has the expertise and infrastructure to manage and distribute charitable funds efficiently, making it easier for you to give.
• Broad Reach: By giving to the Community Foundation, you can support multiple causes and organizations with a single gift, as the Foundation can handle the distribution of funds to various nonprofits.

3. Supporting the Community

• Local Impact: The Community Investment Fund at the Foundation focuses on funding local opportunities and pressing needs, creating a significant positive impact in our community.
• Endowment Building: Gifts to an endowed fund at the Community Foundation can help build long-term and sustainable support for a beloved nonprofit within the community.

4. Legacy and Recognition

• Legacy Building: You can create a lasting legacy through a named fund or specific charitable program that continues to support causes you care about even after your lifetime.
• Recognition: The Community Foundation loves to recognize our donors who value public acknowledgment of their philanthropy.

5. Expertise and Guidance

• Professional Management: The Community Foundation can help you identify high-impact opportunities and ensure your gifts are used effectively.

Kent DuPont wanted to support students in Yale who are working hard and trying to expand their horizons through extracurricular activities such as robotics and the arts. Kent wanted to provide funding to these programs so that annual fundraising was not a burden and to make field trips, like a trip to the DIA in Detroit, accessible to the kids. Kent and his family worked with the Community Foundation to administer and steward his significant gifts from his IRA and a stock gift for the benefit of Yale students through The Kent George DuPont Family Heritage Fund.

Fund Types That Can Receive Gifts from an IRA:

• Community Investment Fund: An unrestricted fund addressing the region’s most pressing opportunities and needs.
• Student Success Funds: Supporting students through scholarships and educational initiatives.
• Designated Funds: Benefiting specific nonprofit organizations.
• Community Funds: Benefiting programs, projects, and initiatives in your hometown.
• Field of Interest Funds: Focusing on broad areas like arts, health, education, and the environment.

Note: Donor Advised Funds cannot receive gifts from an IRA, per IRS regulations.

Overall, giving to the Community Foundation from your IRA allows you to maximize your philanthropic impact while enjoying significant tax advantages and contributing to the well-being of our local community.

For more details about giving from your IRA, please reach out to the Community Foundation for a confidential conversation or appointment. Contact Jackie Hanton at 810-984-4761 or [email protected].

This information is not a substitute for expert legal, tax, or other professional advice. We strongly encourage donors to work with their professional advisor to determine the impact of making a QCD on their particular situations.