Starting at age 70½, clients (and qualified spouses) can now make a Qualified Charitable Distribution (QCD), up to $100,000 each, to eligible charities, from their traditional IRAs with no effect on taxable income.
Problem: Donor Advised Funds (DAFs) are not eligible to receive QCDs.
Solution: iGiftFund is unique among most national DAF sponsor in offering a wide range of Donor Restricted Funds (DRF) that are eligible to receive QCDs.
- Once your client reaches age 72, amounts distributed as QCDs count toward their Required Minimum Distributions (RMD).
- And you can manage investments in the client’s DRF much like you do in a DAF.
It’s a win-win-win strategy that works.
What is a Donor Restricted Fund (DRF)?
In a DRF, the donor imposes restrictions on iGiftFund at the time of the gift that specifies:
- Types of Fund restriction: Designated Fund, Scholarship Fund, Charitable Endowment Fund, Field-of-Interest Fund, Unrestricted Fund, etc.
- Charities or causes that will be supported. Designated charities cannot be changed.
- Spending policy: The formula that specifies the amount for annual grant making (some examples: $1,000 per year; an endowment distribution of 5% per year; etc.)
With a DRF, your client can:
- Create a DRF in his or her name or that of a loved one as an enduring legacy
- Take distributions from a traditional IRA that count toward RMDs (once they’re 72 years or older) with no effect on Adjusted Gross Income (AGI)
- Contribute a wide variety of asset types to the DRF
- Enjoy the best available tax benefits
- Recommend that you manage investments regardless of size, in open architecture, on your familiar investment platform
- Add to the fund as desired and/or create a new DRF next year with new beneficiaries