How to Give

Not only do you have options for how your gift will be used, you also have options on what to give and how to give. There are gifts that cost you nothing now, gifts that pay you income, and gifts that allow you to decide what happens when.

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Qualified Charitable Distribution from your IRA

A qualified charitable distribution (QCD) or "IRA charitable rollover" provides you with an excellent opportunity to make a gift during your lifetime from an asset that would be subject to multiple levels of taxation if it remained in your taxable estate.

To qualify:

  • You must be age 70 ½ or older at the time of gift.
  • Transfers must be made directly from a traditional IRA by your IRA administrator to Good Shepherd Rehabilitation Network usually in the form of a check. Funds that are withdrawn by you and then contributed do NOT qualify.
  • Gifts must be outright. Distributions to donor-advised funds or life-income arrangements such as charitable remainder trusts and charitable gift annuities do not qualify.
  • QCDs cannot be made from a 401k, 403b, SEP or other employer-sponsored plan. QCDs can be made from a Roth IRA, but do not offer the same tax advantages.
  • You may not receive any goods or services in return for your gift, such as gala tickets.

Benefits—qualified charitable distributions:

  • Can total up to $100,000 per year for each individual donor.
  • Transfer tax-free to charity and are excluded from your adjusted gross income for federal income tax purposes (no charitable deduction is available, however).
  • May help lower taxes on Social Security benefits and reduce Medicare premiums.
  • Count towards your annual required minimum distribution for individuals 72 and older.

Example

Jane wants to make a contribution to Good Shepherd Rehabilitation Network. She is 72 and is required to take a minimum distribution of $20,000 from her IRA but does not need the income. She can authorize the administrator of her IRA to transfer $20,000 to Good Shepherd. The $20,000 distributed to Good Shepherd will not be subject to federal tax and will be counted toward her annual minimum required distribution.

As you plan your required minimum distributions for this year, if you do not need the money you are required to take, consider using it for a charitable gift by making a qualified charitable distribution.

See below for sample letters you can send to your plan provider to initiate a qualified charitable distribution. Make sure that you contact us when you direct the distribution so we can look for the check from your IRA administrator.

Please note these special circumstances:

  • If you have a self-directed IRA with check-writing privileges, it is important to make your charitable distribution early to ensure your check clears before December 31.
  • Although QCDs cannot be made directly from a 401k or other retirement plans, you can first make a direct transfer from the 401k to your IRA and then make a QCD from the IRA the following year.

Sample Letter of Instruction from Donor to IRA Provider

{Date}
{Name of IRA Provider}
{Address}
{City, State, Zip}
(Call your plan provider to determine the most efficient way to send this letter of instruction)

Re: Request for Qualified Charitable Distribution from Individual Retirement Account

Dear Sir or Madam:
Please accept this letter as my request to make a qualified charitable distribution from my Individual Retirement under Sec. 1201 of the Pension Protection Act of 2006 (the PPA) and Sec. 408(d)(8) of the Internal Revenue Code of 1986, and made permanent under the Consolidated Appropriations Act of 2016. My account Number is {Account Number}.

Please issue a check in the amount of $____________ payable to Good Shepherd Rehabilitation Network at the following address:

Development Department
850 South 5th Street
Allentown, PA 18103

In the memo of the check, please include my name and "IRA charitable distribution."

It is my intention to have this transfer qualify during the {Year} tax year. Therefore, it is imperative that this distribution be postmarked no later than December 31, {Year}.

If you have any questions or concerns regarding this request, I can be reached at {Phone Number} or {Email Address}.

Thank you for your prompt attention to and assistance with this matter.

Sincerely,
{SIGNATURE OF IRA OWNER}