Skip to main content
Horizontal Rule

Did you know your clients can use their RMD to start a charitable fund?

IRA gift graphic

To alleviate the tax burden of required minimum distributions from IRAs, many advisors are recommending their clients use their RMDs to make qualified charitable distributions (QCDs) to their favorite charities. These tax-free distributions are a financially advantageous way for clients age 70 ½ or older to turn their retirement savings into a meaningful gift.

Unfortunately, QCDs often create an administrative headache for advisors, who must process these distributions to charity individually – sometimes issuing hundreds of checks per year. One solution is to use a QCD to establish a charitable fund at the community foundation.

Although QCDs cannot be made to a donor-advised fund, they CAN be used to establish other types of charitable funds.

Designated funds are a particularly good choice for clients who prefer to support the same charities every year. These funds streamline the giving process by automatically awarding annual grants to one or more charities selected by the donor. Your client simply names their fund, chooses the charities they would like to support, and makes a tax-free transfer directly from their IRA to establish the fund. The community foundation then handles all future administration and check writing, simplifying the paperwork and automating the distribution process for the advisor.

Naomi Ganoe headshot

Naomi Ganoe

"In my experience, designated funds are an excellent option for clients who are passionate about specific charities," said Naomi Ganoe, managing director and private client service practice leader at CBIZ. "Not only do they meet the client's philanthropic goals, but they also reduce the administrative work for the advisor. It's a win-win solution."

In future years, your clients can simply direct their annual RMD to their designated fund, allowing them to support multiple charities with just one QCD. Charitable dollars in the fund are invested and will grow tax-free, increasing your clients' impact on the causes they care about. Most designated funds are also permanently endowed to ensure your clients' legacy lives on long after they are gone.

In addition to designated funds, the community foundation also offers scholarship, field-of-interest and board discretionary funds, all of which can be created with a QCD from your client's IRA. Funds can be named in honor of your client's family or business, or can even be named anonymously if your client wishes to protect their privacy.

For clients who want to support targeted geographic regions or causes, Akron Community Foundation also has affiliate funds whose annual grants benefit programs serving women, children, LGBTQ+ individuals, racial minorities, Bath Township, and the City of Green. All of these funds can accept gifts of IRA assets, allowing your client to support a wide array of charities with a single transfer.

Diane Gilger

Diane Johns Gilger

"We are seeing at KeyBank that our charitably oriented clients over 70 ½ have found a significant benefit with a direct transfer from their IRA to the charity of their choice of up to $100,000*," said Diane Johns Gilger, senior vice president at Key Private Bank. "It benefits the charity by the donation not being reduced by taxes, and it benefits the individual by avoiding pushing them into a higher tax bracket, which can also help avoid Medicare surtax. Distributions to almost all fund types held by community foundations qualify. It's very easy – one phone call and it is put in motion!"

Inherited IRAs also create taxable income for beneficiaries, meaning you may find it's more advantageous for your clients to use their retirement assets to grow their fund at Akron Community Foundation tax-free, while leaving more favorable assets like appreciated stock to their heirs. This is especially true in light of the SECURE Act, which eliminated the stretch IRA and requires non-spousal beneficiaries to take the distributions within 10 years.

To learn more about how you can maximize the impact of your clients' retirement assets, contact Laura Lederer, vice president and chief development officer, at 330-436-5611 or We're always available to answer your questions about philanthropy or to schedule a personal consultation with you and your clients – all at no cost.

*Beginning in 2024, the annual limit for QCDs will be indexed for inflation. The 2024 limit is $105,000.

Additional Resources

This content is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.  

Horizontal Rule

Stay Connected

Sign up for our e-newsletter