By Sara McLeod Judson

Even though it’s the last day of January, it’s a good time to learn why there’s a saying that “January is the new December” when it comes to charitable giving. Many nonprofit donors give at year end to maximize tax benefits; for those older than 70½, there are advantages to giving now.

Even though these topics may sound to some like the old “Charlie Brown’s teacher,” stick with me on this and it just may help you and the causes important to you. RMD or Required Minimum Distribution is closely related to a QCD, Qualified Charitable Distribution. If you’ve reached the age where you take RMDs, QCDs can help offset them. A QCD is a distribution from a traditional IRA owned by someone age 70½ or older paid directly from the IRA to a qualified 501(c)3. Currently, IRA owners may make up to $100,000 in QCDs a year. That means your RMD, and also your taxable income, can be reduced via these gifts.

Ann and Lenn Knapp started using this strategy a few years ago. A retired financial advisor, Ann shared her motivation for making QCDs. “We like to give early so the money can be working for our recipients quickly,” she said. As a nonprofit leader, I appreciate this sooner rather than later approach.

A former Lake Charles resident and Certified Fundraising Executive, Lisa Chmiola, shares her expertise on philanthropy and major gift planning with organizations across the country through her firm, Fablanthropy. She offers these tips to help us demystify RMDs and QCDs:

• Individuals interested in making QCDs should discuss these gifts with their tax advisor and/or financial planner to understand the tax benefits they will enjoy through this type of philanthropy.

• If you are eligible to make QCDs, consider what donations you make to your favorite nonprofits throughout the year, and consider directing these from your IRA instead. The administrator of your IRA can provide you instructions to complete the transfer and many transfers can be handled online.

• Be sure to have the names of the organizations and their tax identification numbers handy when completing your transfers.

• Finally, contact a representative at the nonprofit to let them know you’ve requested a transfer so they can be on the lookout to receive the gift. You’ll need to receive an acknowledgement from the nonprofit to substantiate the gift and prove you did not accept the income but directed it charitably.

Our motto at the Community Foundation SWLA is connecting people who care with causes that matter.  The more you know about using QCDs and other charitable giving tools, the more we can help you connect with causes that matter to you and ultimately improve the quality of life in our region.

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Sara McLeod Judson is the CEO of the Community Foundation SWLA. She can be reached at 337-491-6688 or sjudson@foundationswla.org. For more information, visit www.foundationswla.org.