What is a qualified charitable distribution?
A qualified charitable distribution (QCD) is a distribution of funds from your IRA (other than a SEP or SIMPLE IRA) directly to a qualified charitable organization, such as Auroville International USA.
Because the gift goes directly to the charity without passing through your hands, the dollar amount of the gift is excluded from your taxable income up to a maximum of $100,000 annually, with some exceptions.
Please consult your tax advisor for information regarding your specific exceptions.
To learn more about QCDs, please visit IRS.gov »
Who can make a qualified charitable distribution?
QCDs can be made by IRA owners who are age 70 1/2 or older.
QCDs made prior to the age you are required to take a minimum distribution from your retirement assets (pre-Required Minimum Distribution QCDs) will not reduce or otherwise impact future Required Minimum Distribution. Your tax advisor can provide additional information on your particular situation.
Many individuals who are required to take money from their IRA but do not need it for living expenses have chosen to make QCDs from their IRAs to support Auroville and Auroville International USA. This may make sense for you too!
A QCD may be especially beneficial for donors who do not itemize and use the standard deduction.
How do I make a qualified charitable distribution to Auroville International USA?
Your QCD must be made directly from your IRA administrator to Auroville International USA on your behalf. Each financial institution has its own process for initiating a qualified charitable distribution. Account holders can sometimes find it challenging to access the right information.
Instruct your plan administrator to send a specific dollar amount directly to AVI USA. Your IRA administrator can send the gift by check or electronic transfer.
Here is a sample letter to your IRA Administrator. Please let us know if you plan to do this so we can ensure your gift is processed in an accurate and timely manner.
When is the best time to make a qualified charitable distribution from my IRA to Auroville International USA?
When?
Anytime! But your gift must be completed by December 31 in order to receive the maximum benefits for the current tax year.
Benefits to You
RMD – Your donation will count towards your required minimum distribution (RMD) for the current year. Under current law, every IRA account holder must withdraw a required RMD annually beginning at age 72. Note that although the RMD is not required until age 72, the QCD can still be particularly beneficial for any donors who have reached age 70 1/2 and do not itemize and instead file the standard deduction.
Tax Savings – You can exclude up to $100,000 of this gift from your federal gross income — resulting in lower taxable income and possible tax savings ($200K exclusion may apply for taxpayers who are married and filing a joint return). Tip: This tax savings is especially valuable to donors who are non-itemizers and donors who have reached their limit on itemized charitable deductions.
Impact – You will have the personal satisfaction of benefiting Auroville, maybe more than you may have originally thought possible. Please consult with your financial advisor about this special opportunity. For more information, please contact AVI USA at info@aviusa.org.
Planned Gifts From IRAs Also a Great Idea
While Charitable IRA Rollover Gifts allow donors to further their philanthropic goals and reduce taxable income, designating charitable organizations as beneficiary of IRA, 401(k), pension or other retirement plans also has its benefits. For many years, advisors have been telling clients that IRAs are the very best asset to leave to worthwhile organizations in their estate plans.
See the “IRA, 401(k) plans and other retirement savings arrangements” section on our Planned Gifts page for more information.