A New Way to Give: How Qualified Charitable Distributions Benefit You and Your Community
Don Carpenter of Quincy, Illinois has three big passions in his life. The first is his three grandchildren. The newest of which was born November 10th of 2022. But he also has a strong passion for helping others. That’s why he supports The Salvation Army. It’s one of about six charities he and his wife support with financial donations. The Carpenters have been supporters of their local Salvation Army for years, but within the last year, they have found a new way to donate that works better for them. That is utilizing the Qualified Charitable Distribution from their IRA.
“We can take money from our IRA account. We use our institution, which is Fidelity, to write checks to organizations like The Salvation Army,” says Don Carpenter.
The federal government requires senior citizens, once they reach the age of 70 and a half, to take out 3.9% of the IRA account.
“For those of us lucky enough to have savings in these accounts, We can have institutions like Fidelity write the checks to The Salvation Army directly,” adds Carpenter. “It allows what a person would allocate what they would pay in taxes to the charity of their choice,” adds Carpenter. “If people are concerned about where their tax dollars go, this is a good way for seniors, at least, to appropriate that money to charitable organizations.”
Using this vehicle, some seniors are actually able to make larger charitable donations than they have in the past, depending on how they want to distribute that 3.9%
Carpenter fully retired from the Electrical Engineering Technology field in 2020, and he turned 72 in 2022. That’s when he started looking into making charitable donations through Qualified Charitable Distributions. He was also surprised more charities don’t advertise this as a way to donate. He says charities will ask for checks or credit card payments, but feels they could raise more money for their organizations if more people knew about Qualified Charitable Distributions. So, he’s using his third passion of educating others to tell them how he and his wife have used Qualified Charitable Distributions to benefit the charities that are the most important to them.
As for the charity, it’s a great way to collect more donations. And the donor benefits from tax advantages. A win win for folks like Don Carpenter who can focus his attention back to his major passion of spoiling those grandkids, and also know he’s helping his community be a great place to live. For more questions on Qualified Charitable Distributions, contact your financial advisor, or your local Salvation Army Development Department.