Most attorneys, accountants, and financial advisors are aware of Donor Advised Funds and the reasons behind their popularity. Especially when a Donor Advised Fund is established at the Idaho Community Foundation, this vehicle is an excellent way for your clients to organize their charitable giving and get even more connected to the causes they care about.
Enter the Qualified Charitable Distribution
Your clients can give nearly any type of asset to a Donor Advised Fund at ICF. A notable exception, though, is the Qualified Charitable Distribution (QCD). A QCD allows a taxpayer 70 ½ or older to make a direct transfer of up to $100,000 annually from an IRA to a qualifying charity. A Donor Advised Fund is not considered to be a qualifying charity.
Although Donor Advised Funds cannot accept QCDs, the Idaho Community Foundation offers other types of funds that can accept QCDs. For example, Forever Idaho Funds, Designated Funds and other charitable giving funds held at the community foundation are ideal recipients of QCD transfers. These fund types are often overlooked, despite the high value they can deliver to your client and to the community.
What is a Forever Idaho Fund?
Gifts to Forever Idaho support the region of Idaho designated by the donor – East, North, South Central, Southwest or Statewide. Forever Idaho shows the power of collective giving – hundreds of donations are pooled, and donors make a greater impact than if they gave a single gift on their own.
ICF distributes nearly $1 million every year from its Forever Idaho Funds. Local charities and other community organizations apply annually for grants from Forever Idaho. Decisions about which organizations will receive grants are made by ICF’s Regional Councils – people who live in the communities benefiting from the grants.
What is a Designated Fund?
A Designated Fund provides a way to automatically give to one or more specific community organizations. These are a good choice for a client who knows they want to support a particular charity or charities for multiple years. The client names the fund and ICF fulfills the distributions. Made over time, these funds can help the charity’s or charities’ cash flow planning. Distributions are aligned with your client’s wishes set forth in the original fund document.
QCD reminders
For the client aged 70 ½ through 72, a QCD removes funds from an IRA before the client reaches the age-73 threshold for Required Minimum Distributions (RMDs). This can lessen the eventual income tax hit that accompanies RMDs. And for RMD-applicable clients, the QCD counts toward their RMD. In both cases, the QCD transfers do not fall into the client’s taxable income.
QCDs are even more popular now that the $100,000 cap will be indexed for inflation under the new laws. Also, under the new laws, a one-time, $50,000 distribution to a charitable remainder trust or charitable gift annuity is now permitted.
Our team at the Idaho Community Foundation is happy to help with the charitable components of your service to clients. We look forward to making it easier for you to address all of your clients’ needs.
For more information about ICF, please contact us: