Qualified Charitable Distributions are a tax-efficient way for individuals aged 70½ or older to donate to charity. (Qualified Charitable Distributions (QCDs))

• QCDs can be made by individuals who are 70½ years old or older.
• They can donate directly from their Individual Retirement Account (IRA) to a qualified charity. An individual can donate up to $100,000 per year directly from their IRA to a qualified charity. This amount counts toward the individual’s required minimum distribution (RMD) for the year.
• The amount of the QCD is excluded from taxable income.
• This can be advantageous because it helps reduce the donor’s adjusted gross income (AGI), which can affect the taxation of Social Security benefits and the applicability of certain tax credits and deductions.

Just as donors can contribute cash to a nonprofit, they can also donate stocks, exchange traded funds and other securities. The donated stock is then sold or repurchased, usually by a broker, and your organization receives funds equivalent to the value of each share based on the sale price on that day. (Baker Bower, 2023)

With an estimated $228.89 billion in assets as of 2023 and growing, close to 3 million Americans have chosen to put their money to work within Donor Advised Funds (DAFs), a growing giving vehicle that enables donors to support charitable organizations and causes. (Heisman, 2023)

Donors contribute to a fund managed by a charitable sponsor (Schwab Charitable, BNY Mellon Charitable Gift Fund, Fidelity Charitable, etc.) and receive an immediate tax benefit. Over time, donors can suggest grants from the fund to their favorite charities. The charitable sponsor then distributes grants to the nonprofits chosen by the donors. Beyond cash contributions, donors can also give appreciating assets like stocks, real estate, and more, unlocking significant tax savings.

Donor-advised funds are typically invested in mutual funds or other investment vehicles, allowing the funds to grow and amplify the donor’s philanthropic impact over time. This means their generosity can continue to make a difference, supporting the causes they care about and creating a brighter future. (Patz, 2021) According to the 2024 FreeWill Donor Advised Fund Report 98% of the organizations who are actively promoting or soliciting DAF gifts reported receiving at least one gift in 2023. (Schmitt, P. & Xia Spradling, J., 2024)