Did you know nearly one-third of annual giving happens in December? Even more impressive is that 12 percent of gifts arrive in the last three days of the year! Wow, what is everybody waiting for?
Well, it is the season of giving and the year-end holidays can be a time of reflection that sparks generosity. Another, less altruistic, reason for year-end giving is people need to make charitable giving decisions before Dec. 31 to qualify for a tax deduction. There is still time to reach out to your donors and make that year end appeal!
Are your donors aware of all the ways they can give? For many people with Individual Retirement Accounts (IRAs), there is a requirement to take a minimum distribution annually once they reach age 70 ½. IRA assets often make the best charitable gift because of the tax savings that can be accomplished.
Missing a required distribution can come with a stiff tax penalty. But if a donor is fortunate enough to not need the distribution for living expenses, they can avoid income tax on the withdrawal if they donate it to charity. One thing for donors to be aware of is that a nontaxable charitable distribution must be made directly from the trustee of their IRA to a charitable organization. If they withdraw the money themselves and then donate it to charity, they will need to pay income tax on the distribution.
Distributions from IRAs provide an appealing end of year giving option for donors. 2018 is just around the corner so don’t forget to let donors know about all the good you do and all the ways they can give!
This post is informational and educational in nature. It is not offering professional tax, legal, or accounting advice. For specific advice about the effect of any charitable gift or planning concept on your tax or financial situation or with your estate, please consult a qualified professional advisor.
