In last week’s end of the year budget bill, Congress made permanent the qualified charitable rollover distribution. This lets individuals who are 70 1/2 or older donate up to $100,000 a year directly from their IRA to qualified charities. By doing so, donors can reduce their taxable income (because the money coming out of the IRA won’t count as taxable income to them) and charities can benefit from income-tax free gifts (because qualified charities don’t have to pay income tax on the IRA withdrawals). The charitable rollover counts towards the donor’s required minimum distribution.
In addition to the time-tested check writing method, here are three other ways that you can give that are less obvious and quite beneficial.
- Consider opening up a Donor Advised Fund. You can open up a Donor Advised Fund in 2015 and get a charitable deduction for that gift by year’s end. But, you can make recommendations on how those funds should be spent in 2016 or after. Donor Advised Funds are a great strategy when you need the charitable deduction right away, but haven’t had time to research the charities that you want to support. You can open up Donor Advised Funds at large financial institutions like Schwab and Fidelity and Vanguard and also at community foundations like our very own Silicon Valley Community Foundation.