Submitted by: Mark Eisinger, Executive Vice President (Civitan International)
Maximize Your Impact with Qualified Charitable Contributions (QCDs)
As I prepare for retirement, I am researching how to protect my retirement savings and make the most impact! I have researched the Required Minimum Distributions (RMD) and was surprised at the percentage that would need to be withdrawn every year and the potential for my savings to be taxed. Then I read further about Qualified Charitable Contributions (QCDs) which really made a lot of sense to me. I make donations to Civitan International and my church and other nonprofits. These donations could be Qualified Charitable Contributions and may prevent a taxable withdrawal or part of my withdrawal.
As you approach retirement or perhaps you are already retired, you may be looking for ways to minimize taxes while supporting causes you care about. One powerful option for those with traditional IRAs is the Qualified Charitable Contribution (QCD). This unique giving strategy allows you to make tax-free donations directly from your IRA to a qualified charity — like Civitan International — while potentially satisfying your Required Minimum Distribution (RMD).
What is a Qualified Charitable Contribution?
A Qualified Charitable Contribution (QCD) is a direct transfer of funds from your IRA to a qualified 501(c)(3) nonprofit organization like Civitan International! Here’s why it’s such a valuable tool:
- Tax-Free: QCDs are excluded from your taxable income.
- RMD Satisfaction: If you’re 70½ or older, a QCD can count toward your Required Minimum Distribution.
- Charitable Giving: You can support causes close to your heart while potentially lowering your tax bill.
Key QCD Rules
- Age Requirement: You must be 70½ or older at the time of the donation.
- Annual Limit: You can give up to $100,000 per year via QCDs ($200,000 per couple if both spouses qualify).
- Eligible Accounts: Only Traditional IRAs qualify directly for QCDs.
- Direct Transfer: The donation must be made directly from the IRA custodian to the charity.
What About 401(k) Accounts?
But wait, my savings is in a 401(k) account! Many retirees have substantial savings in 401(k) plans, but unfortunately, QCDs are not allowed directly from a 401(k). However, there’s a smart workaround:
Roll Over Your 401(k) to an IRA
If you’re retired or eligible, you can roll over your 401(k) into a traditional IRA and then make a Qualified Charitable Distribution from the IRA. Here’s how it works:
- Contact your plan administrator to initiate a rollover from your 401(k) to a traditional IRA.
- Once the funds are in your IRA, you can direct your IRA custodian to send a QCD to your chosen charity — such as Civitan International.
By doing this, you unlock the tax-saving potential of QCDs for your 401(k) assets.
Example of a QCD in Action
Let’s say Susan, age 73, has a traditional IRA and is required to take an RMD of $15,000 this year. She doesn’t need all the money and wants to support a nonprofit. She makes a $10,000 QCD to Civitan International. Here’s what happens:
- The $10,000 is sent directly from her IRA to Civitan International.
- Only the remaining $5,000 of her RMD is counted as taxable income.
- She lowers her tax liability without itemizing deductions.
- Civitan receives a generous gift to further its mission.
If Susan had funds in a 401(k), she could first roll them into an IRA and then follow the same process.
Why Support Civitan International?
Civitan International is a nonprofit organization committed to helping individuals with intellectual and developmental disabilities (I/DD). Through service clubs, leadership training, youth programs, and cutting-edge research at the Civitan International Research Center, Civitan is making a lasting difference in communities around the world.
Your QCD helps Civitan:
- Fund research into autism, Alzheimer’s, and other brain disorders
- Empower volunteers to build inclusive communities
- Support youth and adult programs for people with I/DD
When you give through a QCD, your support goes further because it’s tax-free and impactful.
Contact your IRA custodian and Make an Impact! Make Your QCD Today!
Start now to meet your 2025 December 31st deadline! Consider a Qualified Charitable Contribution this year, talk to your IRA custodian or financial advisor. Then, request that your QCD be sent directly to:
Civitan International
Philanthropy Department
P.O. Box 382857
Birmingham, AL 35238
🌐 www.civitan.org
Amasico@civitan.org | Bonita@civitan.org
Phone (205) 591-8910
Contact Amasico Rainer or Bonita Bigbee for more information and instructions. Ask about the Civitan Impact Program! Please include your name and contact information so Civitan can properly acknowledge your contribution.
Give Smart. Give Generously.
By using a QCD — even by first rolling over your 401(k) — you can lower your taxes and raise your impact. Civitan International invites you to be part of a movement of service and inclusion that changes lives every day.
📣 Make your Qualified Charitable Contribution to Civitan International today — and create a legacy of compassion.
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