Best Practices for Marketing QCDs
The Benefits of Making a Qualified Charitable Distribution from an IRA
As we enter the final weeks of the year-end giving season, donors are running out of time to make a Qualified Charitable Distribution (QCD) through their IRA. Make sure your organization is marketing QCDs through email and direct mail.
The following are a few handy tips for communicating the benefits of QCDs to potential donors.
How QCDs Work
QCD is a direct transfer of funds from an IRA, payable to a qualified charity. This option is available to IRA owners who are aged 70½ or older. The IRS permits individuals to transfer up to $100,000 per year from their IRAs to charities without including the distribution in their taxable income. This provision offers a powerful tool for managing taxable income, meeting Required Minimum Distributions, and supporting charitable causes.
Marketing QCDs
Making sure donors know they can make a QCD to your organization is critical. Emails and inserts in direct mail, as well as information on your website, help keep donors informed of their giving options.
It’s also important to make sure you are prepared to address any questions or concerns donors may have, here are some key points to emphasize when marketing QCDs to potential donors:
1. Highlight the Tax Benefits
Educate potential donors on the tax efficiency of QCDs. Emphasize how making a QCD can reduce their taxable income, potentially lower their adjusted gross income, and minimize the taxability of Social Security benefits.
2. Appeal to Donors Philanthropic Goals
Showcase how QCDs align perfectly with their charitable intentions. Explain that by directly transferring funds from their IRA to a charity, they can maximize the impact of their donation, ensuring that the full amount is used for charitable purposes without being diminished by income taxes.
3. Meet Their RMD Requirements
Stress the convenience of meeting IRS-required minimum distributions through QCDs. Highlight that they can satisfy their RMDs without increasing their taxable income, thus managing their cash flow more effectively and aligning their retirement planning with their philanthropic goals.
4. Simplify the Process
Reassure donors about the simplicity and convenience of initiating a QCD. Provide clear instructions and emphasize that their IRA custodian handles the transfer directly to the charity, making the process seamless and straightforward.
5. Address Estate Planning Concerns
For donors with significant retirement savings, explain how QCDs can be an effective estate planning tool. By reducing the balance of their IRA through charitable distributions, they can potentially lower their estate tax liabilities while supporting causes that are important to them.
6. Personalized Communication
In your marketing materials, adopt a personalized approach. Tailor your messaging to resonate with the donor’s values and philanthropic interests. Highlight success stories and testimonials from other donors who have benefited from making QCDs.
7. Host Workshops and Seminars
Organize informational workshops and seminars to educate potential donors about the benefits and process of making QCDs. Provide a platform for them to ask questions and seek advice from financial and tax experts.
8. Collaboration with Financial Advisors
Partner with financial advisors and estate planners who can recommend QCDs to their clients. Equip these professionals with detailed informational brochures and pamphlets that outline the advantages of QCDs.
By focusing on these key points and adopting a strategic approach, you can effectively market QCDs to potential donors, encouraging them to take advantage of this beneficial way to support their favorite charities.
Did you enjoy reading this article and want to read more like it? We recommend these other articles that can help you maximize your Year-End fundraising efforts: Maximizing Your Giving Tuesday or DAF Fundraising Tips: Don’t be Daffy About DAFs.
