How to Make the Most of Charitable Giving

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Guest Blog by Shannon M. Derksen, Esq.

As year’s end approaches, our to-do lists often become longer. And certain goals easily get pushed down the line.

In this blog, my hope is to share a few tips that help you meet your giving goals and benefit the charities you love. These insights are good knowledge to have at any age but are geared to those who are in their 70s or older and have to make the Required Minimum Distribution (RMD) from their Individual Retirement Account (IRA).

I have some great news. Did you know that you can turn your RMD, a required withdrawal, into a Qualified Charitable Distribution (QCD)? And that you can do so before end of year? It’s easy. The gift would be tax-free for you. And you could rest assured knowing that the gift would benefit your favorite charities — perhaps Sky Island Alliance among them, as they grow their programs and work toward long-term endowment sustainability with their Forever Fund.

Below are a few common questions about this option and ways to make it happen. Just note this isn’t intended to be tax or legal advice — make sure to check with your own professionals to find out if this strategy is best for your situation.

What’s a Required Minimum Distribution?  

Once you reach a certain age, you are required to take out a certain amount of your IRA each year. That money is taxable income, so you make the withdrawal and some of it goes to pay taxes. Due to recent changes in the law, the age when you must start taking an annual RMD differs based on when you were born. The RMD age is 70 ½ for those born June 30, 1949 or earlier; age 72 for those born July 1, 1949 through 1950; age 73 for those born in 1951-1959; and age 75 for those born in 1960 or later.

What’s the Opportunity Here? 

If you are charitably inclined, you’re likely already making various donations each year to the organizations you support, typically from post-tax dollars, and then taking a deduction on your income tax return if you itemize. Since the standard deduction has increased greatly, many of us do not even itemize these donations each year. 

The opportunity that a Qualified Charitable Distribution (QCD) presents is that the income from some or all of your RMD, which you are required to take, never comes into your hands and never adds to your taxable income. It is distributed directly to the charity you select. And so if you are close to the edge of an income tax bracket, choosing to make a QCD can keep your income from inching into that higher bracket — the QCD is excluded from gross income. If you are already charitably inclined, this can be a win-win for you and your chosen charity.


You can make a QCD at any time. However, you should be aware that the distribution must be completed by Dec. 31 to be applied to that calendar year. Both financial institutions and charities typically have a rush of activity at year’s end, so it’s a good idea to complete your QCD now if you wish to make one. If you’ve already taken out your RMD this year, put it on your to-do list for next year. Once the funds are in your hands, they are no longer eligible for a QCD — the distribution must be made directly to the charity from your financial institution (i.e. Schwab, Fidelity, Vanguard, etc.)

What Else Should I Know?

You can donate up to $100,000 from your RMD and exclude it from your gross income (the $100k limit is per owner, not per account). This amount will increase for inflation starting in 2024.

Married spouses who are both required to take RMDs can donate up to $200,000. So for donors with a large IRA and large RMDs, a QCD is a good opportunity to reduce your taxable income, especially if you don’t need those funds. Documentation is important, as is the path that the distribution takes — it should go directly to the charity. And even though it’s not going to be shown as a deduction on your tax return, make sure you get a receipt. You will receive a 1099-R from your financial institution and should be sure to let your tax preparer know what part of your RMD you donated. For more info, see this IRS news release.

Shannon M. Derksen is an attorney and partner in the law firm of Fletcher Struse Fickbohm & Wagner, PLC, assisting clients throughout southern Arizona with estate planning, trust and estate administration, and elder law matters. She especially enjoys working on planned giving projects with charitably inclined clients. She also has a background in environmental law and environmental studies and is passionate about environmental justice.