Community Foundation sees increase in donations through retirement accounts | News, Sports, Jobs
ALPENA – Charitable giving through an Individual Retirement Account (IRA) has become an increasingly popular way to give. The Community Foundation for Northeast Michigan has seen an increase in these types of donations in recent years. According to CFNEM, new tax laws and a growing awareness of the benefits of donating through IRAs have been attributed to the growth of this type of donation.
“We have seen a significant increase in the number of donations from IRAs, as well as the total generous donation amounts from our donors,” said CFNEM CEO Patrick Heraghty. “One of the reasons it has become so popular is that it can be made tax free. In an age when the services provided by nonprofits are increasingly in demand, charitable giving can make a huge difference near you. More and more people are realizing that giving in this way can have an impact on the community and be of benefit to the donor. “
Heraghty notes that in 2020, the Minimum Required Distributions (RMDs) have been removed, but have been reinstated for the 2021 tax year. For those who are eligible, the donation of IRA funds to charity by the Through a Qualified Charitable Distribution (QCD) can generate the biggest tax impact for your charitable dollar.
“The Community Foundation received the first donation from a donor’s retirement account in December 2016,” Heraghty explains. “Each year, we see more and more donations coming to the Foundation’s funds thanks to this donation method.
There are a few simple conditions for an IRA distribution gift: The check must not pass through the hands of the donor; it must be written by the IRA custodian directly to the charity, which must be a qualifying charity other than a donor advised or private foundation fund; and you will need recognition from the charity for the donation.
While a donation from an IRA can be made at any time to a charity, Community Foundation staff point out that Giving Tuesday, November 30, may be a great time to make such a gift.
“Our local Giving Tuesday Northeast Michigan event is coming up quickly,” said Christine Hitch, CFNEM director of marketing communications. “We have 60 nonprofits in our nine county service area participating in our event this year, and we want to make sure people know they can use a distribution from a retirement account to be counted in. Giving Tuesday to support one of these organizations. . “
Hitch says for an IRA distribution donation to be considered for Giving Tuesday Northeast Michigan, it must be received by the Community Foundation between November 23 and November 30. She also points out that while Giving Tuesday is a big day of giving, IRA donations can be made at any time to any of the Community Foundation’s over 500 charitable funds or any qualified charity that they care about. heart.
Those looking to make charitable donations through an IRA distribution should contact their tax professional, as the benefits could be substantial.
CFNEM’s service area also includes that of three affiliated foundations: the Iosco County Community Foundation, the North Central Michigan Community Foundation, and the Straits Area Community Foundation.