If you were born before 1954 (age 70 ½ or older, starting anytime during 2023) and have an Individual Retirement Account (IRA), or if you have a spouse, other family or close friends who meet this definition, this is powerful and important information you should know.
If you’re already familiar with the benefits of making donations from your IRA, also known as QCDs (Qualified Charitable Distributions) or “IRA Rollover” gifts, and are ready to make your donation, you can have your account manager/advisor arrange the gift:
Payable to: Clean Water Fund (tax ID 52-1043444) | P.O. Box 188 | Mt. Clemens, MI 48046
Please notify us as soon as your gift has been initiated: leadershipgiving@cleanwater.org or call 202-378-0384.
Remember, your gift must be paid directly from your IRA account to Clean Water Fund to qualify. Gifts to Clean Water Action will not qualify! Be sure to consult your tax or financial advisor for details specific to your individual situation. Read our blog on IRA giving to learn more or download our IRA giving fact sheet here.
More about IRA Donations
New tax provisions adopted in 2019 have raised the minimum age at which you are required to begin withdrawing money from your IRA to 73. In other words, if you turn(ed) 73 at any time in 2023, you are subject to these requirements. Prior to 2023 these same requirements kicked in at a slightly younger age.
These federally mandated withdrawals, called Required Minimum Distributions (RMD), are designed so that funds in your IRA, which are presumed to have grown in value over time and not been taxed, can now be taxed as income, as they are withdrawn.
The Internal Revenue Service (IRS) determines your RMD amount based on the size of your IRA account as of December 31, 2022, and your age/life expectancy. Anyone who is or will be 70 1/2 years old in 2023 is allowed to make QCD donations from their IRA, even if you are not yet old enough to be subject to the federal RMD requirements.
Here’s what you need to know:
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Instead of taking your RMD as income, you can donate some or all of that amount to a qualified 501-c-3 nonprofit like Clean Water Fund.
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Your gift must be made directly from the IRA account to Clean Water Fund. If you receive the withdrawal directly and then donate it, your withdrawal will be taxed as income.
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The amount you can pull from your IRA in the form of direct charitable donations is not limited to the RMD amount, if you have one. IRS rules allow you to donate up to $100,000 per year from your IRA without tax or penalty, as long as the funds are moved directly from your IRA to the qualified nonprofit(s).
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The financial advisor/institution that manages or holds your IRA is familiar with this charitable giving opportunity and its potential tax benefits to you, as a donor. But, often, donors must ask or initiate these kinds of donations, known as Qualifying Charitable Distributions (QCDs).
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IRA donations (QCDs) can be made at any time, but must be received and deposited by the nonprofit by December 31 of the year in which the donations are made. Otherwise they may not count towards the donor’s RMD requirement for that same year.
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You should consult with your financial advisor, lawyer or tax accountant to determine how this charitable giving opportunity could benefit you and allow you to become a more generous donor.
Here’s how you can initiate a gift from your IRA to Clean Water Fund (a QCD):
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Contact your financial advisor/manager or accountant to discuss your RMD amount for 2023 (if any), and the amount you’d like to consider donating to qualified nonprofits like Clean Water Fund. If you turned (or will turn) 70 ½ in 2023, you are not required to start taking annual withdrawals from your IRA, but you may still choose to do so for charitable purposes (by making a QCD). It is not uncommon for IRA gifts (QCDs) to be among the largest gifts a donor may make during their lifetime. Your advisor can help you understand the tax benefits, based on your own specific financial situation. As noted above, you can donate more than your RMD amount if you choose, up to $100,000. Married couples who file joint income tax returns and are both subject to RMDs may give a combined total of up to $200,000.
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When you have determined the amount for your 2023 QCD gift to Clean Water Fund, you will need to provide the financial institution which manages your IRA with specific instructions that include the following information about Clean Water Fund (they may have a form they can mail to you or that you can access online for this purpose) — the nonprofit’s name, address and tax ID number, along with the amount you’d like to donate. For Clean Water Fund, the address is PO Box 188 Mt. Clemens, MI 48046; Clean Water Fund’s tax ID is 52-1043444.
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Notify Clean Water Fund as soon as you have initiated your gift, so that we can confirm its receipt, account for it properly and provide a personal thank you. You can do this by email, leadershipgiving@cleanwater.org or by calling 202-378-0384.
Consider Making a Clean Water Legacy Gift Part of Your Plans.
This can be accomplished simply by using your IRA account’s Beneficiary Designation form to specify that you’d like a specific percentage of whatever remains in your account at the time of your passing to go to Clean Water Fund. It is helpful to include Clean Water Fund’s tax ID (52-1043444) and national office address (1444 “Eye” Street, NW, Suite 400, Washington, DC 20005) as part of your Beneficiary Designation instructions. If you already have a spouse or partner listed as a beneficiary, adding Clean Water Fund as a beneficiary may require their signature as well. By using percentages to designate your beneficiary(ies) you can take care of both the people and the causes you care about most, and avoid having to make adjustments as your account balances change.
Please let us know when you decide to make a Clean Water Legacy gift commitment of this type, by sending a short email to leadershipgiving@cleanwater.org, so that we may thank you appropriately.
