If you were born before 1952 (age 70 ½ or older, starting anytime during 2021) and have an Individual Retirement Account (IRA), or if you have a spouse, other family or close friends who meet this definition, this is powerful and important information you should know. If you’re already familiar with the benefits of making donations from your IRA, also known as QCDs (Qualified Charitable Distributions) or “IRA Rollover” gifts, and are ready to make your donation, you can have your account manager/advisor arrange the gift:
Payable to: Clean Water Fund (tax ID 52-1043444) | P.O. Box 188 | Mt. Clemens, MI 48046
Please notify us as soon as your gift has been initiated: email@example.com or call 202-330-2379
Remember, your gift must be paid directly from your IRA account to Clean Water Fund to qualify. Be sure to consult your tax or financial advisor for details specific to your individual situation.
More about IRA Donations
Ordinarily, when someone turns 70 ½ years old, the Federal government requires you to start withdrawing money from your IRA. This amount, called a Required Minimum Distribution (RMD) is calculated by the Internal Revenue Service (IRS) based on the size of your account as of December 31 of the previous year, and your age/life expectancy. The RMD rules exist so that funds in the IRA, which presumably have grown in value over time and not been taxed, can now be taxed as income, as they are withdrawn.
Here’s what you need to know:
- Instead of taking your RMD as income, you can donate some or all of that amount to a qualified 501-c-3 nonprofit like Clean Water Fund.
- Your gift must be made directly from the IRA account to Clean Water Fund. If you receive the withdrawal directly and then donate it, your withdrawal will be taxed as income.
- The amount you can pull from your IRA in the form of direct charitable donations is not limited to the RMD. IRS rules allow you to donate up to $100,000 per year from your IRA without tax or penalty, as long as the funds are moved directly from your IRA to the qualified nonprofit(s).
- The financial advisor/institution that manages or holds your IRA is familiar with this charitable giving opportunity and its potential tax benefits to you, as a donor. But, often, donors must ask or initiate these kinds of donations, known as Qualifying Charitable Distributions (QCDs).
- IRA donations (QCDs) can be made at any time, but must be received and deposited by the nonprofit by December 31 of the year in which the donations are made. Otherwise they may not count towards the donor’s RMD requirement for that year.
- You should consult with your financial advisor, lawyer or tax accountant to determine how this charitable giving opportunity could benefit you and allow you to become a more generous donor.
Here’s how you can initiate a gift from your IRA to Clean Water Fund (a QCD):
- Contact your financial advisor/manager or accountant to discuss your RMD amount for 2021, and the amount you’d like to consider donating to qualified nonprofits like Clean Water Fund. It is not uncommon for IRA gifts (QCDs) to be among the largest gifts a donor may make during their lifetime. Your advisor can help you understand the tax benefits, based on your own specific financial situation. As noted above, you can donate more than your RMD amount if you choose, up to $100,000.
- When you have determined the amount for your 2021 QCD gift to Clean Water Fund, you will need to provide the financial institution which manages your IRA with specific instructions that include the following information about Clean Water Fund (they may have a form they can mail to you or that you can access online for this purpose) – the nonprofit’s name, address and tax ID number, along with the amount you’d like to donate. For Clean Water Fund, the address is PO Box 188 Mt. Clemens, MI 48046; Clean Water Fund’s tax ID is 52-1043444.
- Notify Clean Water Fund as soon as you have initiated your gift, so that we can confirm its receipt, account for it properly and provide a personal thank you. You can do this by email, firstname.lastname@example.org or by calling 202-330-2379.
Consider Making a Clean Water Legacy Gift Part of Your Plans. This can be accomplished simply by using your IRA account’s Beneficiary Designation form to specify that you’d like a specific percentage of whatever remains in your account at the time of your passing to go to Clean Water Fund. It is helpful to include Clean Water Fund’s tax ID (52-1043444) and national office address (1444 “Eye” St, NW, Suite 400, Washington, DC 20005 as part of your Beneficiary Designation instructions. If you already have a spouse or partner listed as a beneficiary, adding Clean Water Fund as a beneficiary may require their signature as well. By using percentages to designate your beneficiary(ies) you can take care of both the people and the causes you care about most, and avoid having to make adjustments as your account balances change. Please let us know when you decide to make a Clean Water Legacy gift commitment of this type, by sending a short email to email@example.com, so that we may thank you appropriately.