How a Charitable Rollover Might Fit Your Plans for Generosity

Each day, we support teens in their journey toward financial freedom. So it’s nice to be able to remind those who share our passion for this mission about tools they might be able to take advantage of with their own generosity.
One way is through what is commonly called an IRA Charitable Rollover. If you are at least 70½ years old, you are eligible to transfer up to $100,000 from your Individual Retirement Account (IRA) directly to a charity or nonprofit without reporting it as a deduction or income on your taxes. You can do this once per year, within a calendar year. The Charitable Rollover also counts towards your required minimum distribution (RMD) for the year.
By using the Charitable Rollover, you can support organizations with a mission close to your heart while not incurring the tax or financial penalties sometimes associated with IRA withdrawals, according to Jeff Billings, an estate planning attorney with Godfrey & Kahn.
It is important to note that the nonprofit of your choice must receive the funds directly from your IRA custodian (you cannot distribute the funds to your own account and then give them to your charity). At Make A Difference – Wisconsin, we convert support like this into programs and resources that empower teenagers to take control of their own financial futures. They are also a welcome option of generosity by supporters like Howard Schnoll.
“This was an ideal fit for me. I was able to take care of a portion of my minimum distribution for the year. At the same time, I steered money toward Make A Difference – Wisconsin, a cause and nonprofit that I care about deeply,” said Schnoll, pictured at left in August as he spoke to supporters and Money Coach students Anayeli and Nia.
For those people who qualify, the first step is to contact your financial advisor and/or the custodian of your IRA to arrange for the direct transfer of the funds to the nonprofit of your choice. Your advisor/custodian can then assist you with the details of the transfer.
The I.R.S. includes more information on charitable rollovers on its FAQ page. Of course, this blog should not serve as direct financial advice. Please take all of the appropriate steps with your financial advisor for your specific situation.
However, we hope that sharing this information might give some a new facet in your community support through nonprofits like Make A Difference – Wisconsin.

(Information in this blog is accurate as of March 9, 2017.)