Qualified charitable distributions (QCDs), also known as charitable IRA rollovers, are particularly appealing to donors because they provide a tax benefit whether or not the donor itemizes deductions. While on the surface they seem simple – request a payment go directly from the plan administrator to a qualifying charity – there are nuances to these types of gifts of which charities should be aware. Let’s take a closer look at some of those subtleties as they relate to QCD requirements.
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Planned giving departments need to demonstrate accountability for results in terms of gift revenue. Our challenge, of course, is that we generally don’t know how much planned gift revenue is coming or when it will come in, making it very difficult to accurately measure the results of current efforts. Let’s look at how using a combination of historical realized planned gifts and current calculations can generate a reasonable picture of the value of your planned gift pipeline.
Life is full of rules, and planned giving is certainly no exception. When we talk about IRS rules and planned giving, we mean not only specific sections of the federal tax code, but also IRS rulings, conditions, limitations, and the like. In putting together our webinar for August 27, which will highlight 10 rules that gift planners should know, we thought it might be helpful to provide a brief preview in this format.
The Coronavirus Aid, Relief, and Economic Security Act, better known as the CARES Act, became law in late March. The Act includes several provisions of interest to gift planners. Arguably the most significant of these is the ability to waive the usual 60%-of-adjusted-gross-income limit on deductions for gifts of cash made to public charities in 2020. This change creates several gift opportunities that will appeal to some donors.
At this point, we find ourselves in seemingly unprecedented times. The COVID-19 pandemic is sweeping the globe, infecting millions of people, and leaving hundreds of thousands of fatalities in its wake. The worst is likely over in China, and life is starting to return to some new kind of normal. In Europe, a few countries have reached the so-called apex, but other countries are at varying stages along the spectrum of the crisis. In the U.S., the picture changes greatly from state to state. By most accounts, New York – the first epicenter – has seen its peak of the crisis and is now on the downside, but the majority of states are still facing a significant ramping up in the coming days and weeks. The human toll is beyond anyone’s worst imagination, and it will certainly get worse before it gets better. This will define our country and modern-day societies for generations to come. We attempt to offer some perspective in a blog post entitled Peaks, Valleys, and Life In Between.
The novel coronavirus, or COVID-19, is spreading like wildfire around the globe, unsettling the stock market and causing operational disruptions to industries of every description. High schools and colleges are sending students home for the remainder of the term. Social distancing and self-quarantine are being applied by health officials. Millions of Americans are living in uncertainty and fear of what will come next.
So… Is now a good time to send that next direct mail postcard on CGAs or QCDs? Yes!
We noted 2019’s phenomenal stock market performance in the February 2020 edition of PG Calc’s eRate newsletter. The S&P 500 Price index returned 33.07% in 2019 if you include dividend reinvestment. Stock in Axsome Therapeutics, the maker of the common anti-depressant Wellbutrin, gained an astounding 3,578%!
The nature of planned gift fundraising (and sometimes outright giving as well) is that there are times when donors, gift plans, and assets present situations where there is little gift component. Even worse, some “gifts” create a net liability in terms of the asset or reputational damage. Nonetheless, there are danger signals that a gift may be problematic and procedures to prevent accepting gifts with traps.
People to continue to ask, “can’t we establish a Gift Annuity with funds from an IRA?” The short answer is that you absolutely can, and can also establish a charitable remainder trust using money withdrawn from a qualified retirement plan.
What are you planning for your year-end planned giving marketing campaign? It’s not too early to be solving this problem. While mailing to your donors is important year-round, the fall, before Thanksgiving, can be a particularly opportune time to communicate with donors. This is especially true for planned gifts, as many of these gifts are completed late in the year.