Creative Ways to Give: IRA QCDs, appreciated stock, and DAF distributions
By Fritzie Dizon
I’m not quite sure how this happened but summer is quickly winding down, there’s already Halloween candy on the shelves at the grocery store… and end-of-year planning is upon us. If you read last week’s Annual Giving Subject Matter Expert blog on end of the year planning, you hopefully have begun thinking about your communications strategy for the end of year. Three gift vehicles to consider for end-of-year outreach include: IRA qualified charitable distributions (IRA QCDs), gifts of appreciated stock, and donor-advised fund (DAF) distributions. Although these are not your traditional planned gifts (because they are not deferred), they fall under the planned giving umbrella since they are not your typical outright cash gifts and require a little extra time and planning on the donor’s part.
Below are some high-level benefits for each gift type:
- IRA QCDs: Donors 70½ and older can make gifts up to $100,000 directly from their individual retirement account (IRA) to a nonprofit of the donor’s choice. This QCD donates pre-tax dollars andthe earned income is never taxed because it is transferred directly to the nonprofit.
- Appreciated stock: Donating appreciated stock (stock that has been owned for a year or more) has double the tax benefits for the donor. Firstly, the charitable deduction is the same as if the donor were making a gift of cash. Secondly, the donor avoids paying capital gains tax on the appreciated value of the stock.
- DAF distributions: DAF gifts allow donors to make a lump-sum charitable contribution, receive an immediate tax deduction, and then allows them to recommend grants from the fund to nonprofits over time. Some think of a donor-advised fund as a sort of “philanthropic checking account.” Additionally, donors can also name your organization as a beneficiary of their DAF, which can potentially lead to a bigger payout later. For more information on DAF giving, you can read GOBEL’s Best Practices for Non-Profits Seeking Gifts from Donor-Advised Funds blog.
You can incorporate messaging for any of these gift vehicles in your year-end annual fund communications or consider creating standalone, targeted, multi-channel pieces if your schedule allows). As noted above, these gifts take more time to execute, somake sure you’re sending these communications in a timely manner. I would recommend partnering with your annual fund director in strategizing what gifts to promote, how to promote them, and to coordinate the timing of each communication if necessary.
Although the weather here in southern California is still giving summer vibes, the end of the year and holidays will be here before we know it. Before we all get swept up in the end-of-year rush, take advantage of this time to plan ahead. Hopefully, you’ll find these tips helpful in expanding the possibilities for your fundraising revenue not just at the end of 2023, but beyond as we head into 2024.
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Estate planning needs will differ based on personal circumstance and applicable state and federal laws. The information provided here is for educational purposes only and is not intended to provide and should not be construed as providing legal or tax advice. This is general information and should not intended to serve as the primary basis for tax-planning or investment decisions and is not a substitute for the advice from an attorney or financial advisor.
ABOUT GOBEL SUBJECT MATTER EXPERTS: GOBEL Subject Matter Experts are healthcare philanthropy professionals working in some of the top shops in the country, sharing best practices and insights. For more information about GOBEL’s Subject Matter Expert program, or to suggest a topic for coverage, email jmoody@gobelgroup.com.
ABOUT THE AUTHOR:
Fritzie Dizon is the Director of Estate and Gift Planning at Scripps Research in La Jolla, California. Fritzie began her career in fundraising as a Development Assistant in Principal Gifts at UC San Diego and then at the Birch Aquarium at the Scripps Institution of Oceanography. Before joining the team at Scripps Research, Fritzie worked with the Office of Gift Planning at Columbia University and Columbia University Irving Medical Center for 9 years. During her time with Columbia, Fritzie honed her knowledge in planned giving and learned to appreciate its impact and power in philanthropy. Her involvement in two campaigns at Columbia University provided unique experiences in the role of planned gifts as it relates to strategic planning, operations, donor relations and marketing.
Fritzie is a graduate of UC Irvine with a degree in Environmental Analysis and Design. She is also a graduate of the Nonprofit Management Graduate Program at the School of Professional Studies at Columbia University. Over the last five years she has also served as an Adjunct Associate Instructor for the School of Professional Studies at Columbia for the Marketing Strategies and Introduction to Planned Giving courses.
When Fritzie isn’t working, traveling, or reading on the beach, she enjoys being an auntie to her four nieces and nephews (her favorite role!).
