Encourage Charitable IRA Gifts
The Tax Cuts and Jobs Act of 2017 ushered in several changes to our nation’s tax laws that may impact charitable giving. One of the things that remained untouched was the Charitable IRA (CIRA) provision. The CIRA is even more attractive in light of the tax act’s raising of the standard deduction reducing the number of individuals who can itemize.
What is the CIRA?
The CIRA provision allows individuals age 70½ and older to make charitable gifts from individual retirement accounts (IRAs) directly to qualified charities in any amount up to $100,000 per year tax free.
This provision applies only to IRAs and not to 401(k)s, 403(b)s or other tax-favored retirement plans. Gifts must be transferred directly to a qualified charity and may not be made to donor advised funds, private foundations or supporting organizations. CIRA gifts can count toward minimum required distributions, thereby eliminating taxes on those funds.
Encourage CIRA gifts early in the year!
Traditionally, many organizations have waited until year-end to encourage gifts from IRAs. For several years, it was uncertain whether the CIRA would be still be available until Congress would renew the provision (usually in December) retroactively for the year.
In 2015, the CIRA became permanent, so there was no longer a reason to wait until December to ask for these gifts. In fact, because people with an IRA who are 70½ and older must take withdrawals from their balances each year—the required minimum distribution (RMD)—it is more effective to inform your donors of the advantages of this giving option early in the year before they take their annual RMDs.
Sharpe Group has communication materials you can use to educate your donors about this law and how it will benefit them:
- “The Charitable IRA” brochure
- Free postcard PDFs available online for immediate download to print
- Suggested language for donor communications
Other Sharpe publications that also incorporate information about the CIRA:
- Charted Giving Plans (booklet)
- Giving Through Retirement Plans (booklet)
- Planning for the Future (booklet)
Sharpe Give & Take articles provide helpful resources to better understand the CIRA and how to promote this way of giving:
- “A Review of Charitable IRA Gifts” (May 2018)
- “Making the Most of Charitable IRA Gifts” (May 2018)
- “The Charitable IRA Boom” (April 2017)
- “Five Tips for Fundraisers New to Gift Planning” (March 2017)
- “Who Has an IRA?” (February 2017)
- “Don’t Let Your Charitable IRA Donors Make This Common Mistake” (January 2017)
- “Help Your Donors Understand the Charitable IRA Law” (February 2016)
Sharpe Group blog articles:
- “Let’s Look at Charitable IRA Gifts” (March 28, 2018)
- “Finally! The Charitable IRA Provision Is Permanent” (January 11, 2016)