IRA RMD Charitable Fund

Using IRA Required Minimum Distributions (RMDs) for charitable giving can be a tax-efficient way to support your community. Here are some examples of how you can donate your IRA RMD to a community foundation and benefit both the community and yourself:

1. Qualified Charitable Distribution (QCD) to a Community Foundation

  • If you are 70½ or older, you can donate up to $100,000 per year directly from your IRA to a qualified 501(c)(3) organization, such as a the Longmont Community Foundation.
  • The QCD counts toward your RMD, but it is not included in your taxable income, potentially reducing your tax burden (and with estates, the burden of your heirs)

2. Establishing a Designated Fund for Local Causes

  • You can direct your IRA RMD to set up a designated fund within the community foundation, which will support a specific nonprofit of your choice (e.g., local food banks, youth programs, or animal shelters).
  • This ensures sustained support for causes you care about.

3. Supporting a Field-of-Interest Fund

  • Instead of donating to a single nonprofit, you can contribute your RMD to a field-of-interest fund (e.g., education, healthcare, arts, or environmental projects).
  • The foundation will distribute grants to organizations aligned with your selected cause.

4. Creating a Scholarship Fund

  • Your IRA RMD can help establish or contribute to a scholarship fund at the community foundation.
  • This can provide educational support to local students in need, helping them pursue higher education.

5. Contributing to an Unrestricted Community Impact Fund

  • Some donors prefer to let the community foundation decide where their donation is most needed.
  • An unrestricted donation from your IRA RMD allows the foundation to respond flexibly to emerging needs and crises in the community.

Tax and Financial Benefits

  • Avoid taxable income from your RMD during lifetime. For Estate Planning the retirement assets are ‘removed’ from inheritance and thereby are not taxable liability for your heirs
  • Meet your RMD requirement while supporting charitable causes
  • Enhance community impact through structured giving