Americans distributed an average of $9,200 from their IRAs to charities from 2017 to 2018, according to a new report from FreeWill, a fundraising firm.
These qualified charitable distributions — commonly known as IRA charitable rollover gifts — surged by 73.8% over that period, and 92% of nonprofit organizations surveyed by FreeWill reported increases in QCD giving.
The 7% of nonprofits that reported a decrease were mainly very small charities that received few QCD donations in both years, the report said.
FreeWill noted that QCDs are open to anyone 70-1/2 and older with a traditional IRA — 401(k)s are not eligible for QCDs. Distributions from IRAs can satisfy the IRS’s minimum distribution requirement. These gifts can be made annually up to a maximum of $100,000 per year; there is no minimum.
FreeWill’s research comprised a survey and conversations with upward of 120 nonprofits with total revenue ranging from $1 million to $1 billion.
The research showed that QCD gifts are getting bigger. Fifty-two percent of charities surveyed reported that the average gift had increased since 2017. Only 12% said the average had decreased, and 30% reported no change.
What accounts for the sharp growth in giving via QCDs? Fifty percent of respondents said demographics were responsible, while 27% pointed to changes in the tax law.