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Charitable Giving with IRAs

Individual Retirement Accounts (IRAs) serve as powerful tools not only for retirement savings but also for philanthropic endeavors. By strategically utilizing their IRAs for charitable donations, your clients can maximize tax benefits while supporting causes they care about.

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QUALIFIED CHARITABLE DISTRIBUTIONS (QCDS)

  • If your clients are 70 ½ or older, making a qualified charitable distribution from their IRA to an OCF fund or other charity makes a wonderful gift. A distribution of up to $108,000 may be made in 2025, it will not be recognized as taxable income and it may count toward your clients’ required minimum distributions.
  • Your clients may also distribute up to $54,000 in 2025 per person from an IRA QCD to create a charitable gift annuity or charitable remainder trust that pays your client or their spouse an income for life or term of years, with the remainder added to your client’s OCF fund. This is an opportunity your clients can take advantage of just once in your client’s lifetime.
  • It’s prudent for your client to consult with a tax advisor or financial planner to explore the most advantageous strategies for their individual circumstances.

ELIGIBLE CHARITABLE FUNDS

While qualified charitable distributions cannot go into a donor advised fund, OCF offers several other charitable funds that may receive QCDs:

  • Scholarship Fund (the donor establishes the criteria for students to support)
  • Designated Fund (the donor names designated organizations to support)
  • Field of Interest Fund (the donor states subject matter or geographical areas to support)
  • Strategic Initiatives at OCF (pooled funds created by OCF in multiple strategic areas)

All of these fund types can be set up as step-up funds, which let your clients add incrementally to a fund until it reaches the required fund minimum.

BENEFICIARY DESIGNATIONS

Your clients can name a charity or their OCF fund as a sole, partial, or contingent beneficiary of an IRA, providing a wonderful benefit to charity without a tax liability for your clients, their heirs or their estate.