Facts & Fiction: Giving from your IRA in 2020
By Topher Anderson, Donor Relations Officer
As we’re approaching the end of the year, many of us are looking at our year-end giving plans. As you’re doing so, knowing how to give can make your donations go even further.
If you’re 70.5 years old (or better!), giving from a traditional IRA is the most tax-savvy way to make your donation go further. But between recent legislation, confusing qualifications, and hard-to-track down forms, this type of giving has been filled with roadblocks to this smart giving method — especially in a year as tumultuous as 2020.
So we want to take a moment to address some common myths about creating a Qualified Charitable Distribution (QCD) from your IRA so that you have the information you need to make your smartest gift yet.
Myth: I’m not legally required to withdraw money from my IRA in 2020 because of recent legislation, so I shouldn’t make a QCD gift.
Fact: It’s true that the CARES Act waived Required Minimum Distributions (RMDs) for 2020. This means there is no minimum amount you are legally required to remove from your traditional IRA account this year. But it’s false that this legislation removes the importance, or the benefits, of giving from your IRA! QCDs are a 100% tax-free way to donate your pre-tax dollars and reduce your future tax burden. In a year of financial difficulty for many, QCDs are just as impactful as cash gifts without breaking the bank.
Myth: I can’t use funds from my IRA to support the work of CCL because it is a 501(c)(4) group.
Fact: While you can’t donate directly to CCL from your IRA, you can donate directly to its 501(c)(3) sister organization, Citizens’ Climate Education (CCE). CCE provides the training and tools to educate our coalition on climate solutions and the most effective ways to raise public and political will. CCE also provides strategic outreach and regional conferences to grow and mobilize our coalition of 185,000 supporters and 475 chapters. A donation to CCE directly strengthens that amazing grassroots network that makes CCL’s work possible.
Myth: There’s no easy way to find and complete the necessary paperwork to make a QCD.
Fact: Our supporters have expressed their frustration and confusion when trying to support our work through their IRA. Using traditional methods, it often takes more than an hour to complete QCD paperwork. That’s why we’ve partnered with FreeWill to provide an easy-to-use resource to help you learn more and get started on your QCD — in 10 minutes or less, at no personal cost.
FreeWill’s tool helps to complete the paperwork for you, and requires no sensitive security information. You can use this tool to:
- Make your QCD to empower national climate action
- Request a tax acknowledgment letter for a QCD you’ve already made
- Download the forms you need if you’d prefer to finalize your QCD offline
- Learn more about QCDs and giving from your IRA to see if it’s right for you
Topher Anderson is a Donor Relations Officer for both Citizens’ Climate Lobby and Citizens’ Climate Education. If you have any questions about your donation, please contact Topher at email@example.com. Thank you for allowing CCL’s work to thrive with your generosity!