By Michael Morse, Executive Director, Catholic Community Foundation of Southwest Florida
With the passage of the SECURE Act 2.0 on December 29, 2022, individuals can now establish a charitable gift annuity with the Catholic Community Foundation of Southwest Florida through a qualified charitable distribution (QCD) from their individual retirement account (IRA).
Charitable gift annuities date back to 1919 but remain a great way for donors to support their favorite charity and received fixed payments for life in return. Donors have historically established gift annuities with gifts of cash, stock, or other appreciated assets. The ability to fund a gift annuity with a distribution from an IRA is a brand-new option.
A major benefit of this new option for donors that are 73 or older, is that the QCD contribution will count toward the annual required minimum distribution (RMD) from their IRA. Donors will also benefit from the security of a fixed income from the Catholic Community Foundation for the remainder of their and/or their spouse’s life. Additionally, donors will be providing future support to the Catholic Parish, School or entity about which they care most.
Please note, to establish a charitable gift annuity using a QCD from an IRA, you must be at least 70 ½ years of age at the time of the transfer, the annuity can only benefit the donor and/or their spouse, and it must come from a traditional IRA. This option can only be used in a single calendar year during the donor’s lifetime and there is an aggregate limit of $50,000 per taxpayer. A married couple can each contribute $50,000 from their respective IRAs for a total of $100,000.
It is important to remember that there is no federal charitable income tax deduction for the QCD transfer. Also, when using a QCD to establish a charitable gift annuity, the payments received by the donor(s) will be subject to ordinary income tax.
For donors interested in establishing their Catholic Legacy by supporting the long-term sustainability of the Church, while at the same time generating lifetime payments for themselves, a charitable gift annuity with the Catholic Community Foundation may be a great option.
If you would like to learn more about establishing a charitable gift annuity with the Catholic Community Foundation, or if you would like to learn more about other gifting options, please contact Michael Morse at 941-441-1124 or Morse@dioceseofvenice.org.