Your IRA or other retirement accounts may not be the first assets that come to mind when you think about charitable giving. But for many people, they can offer meaningful opportunities to support the organizations and causes they care about, both today and as part of a future legacy.
They can also come with plenty of rules! That’s why the Lenawee Community Foundation is here to help. Our team can work alongside your tax, financial, and estate planning advisors to explore how retirement assets might fit into your overall charitable plans.
As year-end approaches, here are five things worth knowing, plus one important bonus.
1. Age 70½ Is Still an Important Charitable Giving Milestone
If you’ve reached age 70½, you may be eligible to make a Qualified Charitable Distribution, or QCD, directly from your IRA to an eligible charitable organization.
This opportunity begins even though Required Minimum Distributions generally don’t begin until later, at age 73 or 75, depending on your birth year. In other words, you don’t have to wait until RMDs begin to consider using a QCD as part of your charitable giving.
2. The 2026 QCD Limit Is $111,000 Per Taxpayer
The annual QCD limit is indexed for inflation and is $111,000 in 2026. If you’re married and both you and your spouse meet the eligibility requirements and have your own IRAs, each of you has a separate limit.
Unlike a conventional charitable contribution, a QCD generally is excluded from your taxable income rather than claimed as a charitable income tax deduction. And if you’re already taking RMDs, a qualifying QCD can count toward satisfying your RMD.
That can make a QCD an especially useful option if you don’t itemize deductions, or if you’d simply like to use a portion of your IRA to make a difference for the organizations and causes you care about.
3. Make Sure the Money Travels the Right Path
With QCDs, the details matter. To qualify, the distribution must be made directly from your IRA to an eligible charitable organization. Generally, you can’t withdraw the money yourself, deposit it into your bank account, and then write a check to charity and receive QCD treatment.
There’s another important limitation: Under current law, donor-advised funds generally cannot receive QCDs. But if you have a donor-advised fund at the Lenawee Community Foundation, that doesn’t mean the Foundation can’t help.
Other types of funds may be eligible to receive QCDs, including, in many cases, designated funds that support particular organizations, field-of-interest funds focused on causes you care about, and unrestricted funds that give the Foundation flexibility to respond to Lenawee County’s changing needs.
Before initiating a transfer, reach out to our team and your professional advisors. Together, we can help you explore which options may best fit your charitable goals.
4. Keep an Eye on Potential Changes
QCD rules could become more flexible in the future. Bipartisan proposals currently under consideration would expand how these charitable distributions can be used.
One proposal, the Charity Parity Act, would allow eligible donors to make QCDs directly from certain employer-sponsored retirement plans, such as 401(k)s and 403(b)s, rather than requiring charitable distributions to come from an eligible IRA.
Another bipartisan proposal, the IRA Charitable Rollover Facilitation and Enhancement Act of 2026 (S. 3975), would allow QCDs to donor-advised funds.
Neither proposal is current law, so these expanded options aren’t available yet. But they’re worth watching, particularly if retirement assets or a donor-advised fund are an important part of your charitable plans.
5. Don’t Forget About Your IRA When Planning Your Legacy
QCDs can help you use retirement assets for charitable giving during your lifetime. But there’s another opportunity that’s easy to overlook: You can name a charitable organization, including your fund at the Lenawee Community Foundation or the Foundation itself, as a beneficiary of an IRA or other retirement account.
Retirement accounts can be particularly attractive assets to leave to charity. Traditional retirement assets left to individual heirs may carry income tax consequences, while a tax-exempt charitable organization generally does not pay income tax when it receives those assets.
And the process may be simpler than you think. You may be able to leave all or a percentage of a retirement account to charity by updating your beneficiary designation without changing your will or revocable trust. Of course, any beneficiary designation should be coordinated with your overall estate plan and reviewed with your legal, tax, and financial advisors.
And a Bonus: You Don’t Have to Figure It Out Alone
Retirement assets sit at the intersection of tax planning, financial planning, estate planning, and charitable giving. That’s why we value the opportunity to work alongside you and your professional advisors.
Whether you’re considering a QCD before year-end, thinking about including charitable giving in your beneficiary designations, or simply wondering whether your retirement assets could help you accomplish more for the causes you care about, we’d be honored to be part of the conversation.
You know what matters most to you. Our team can help you explore how the assets you’ve worked hard to build can create meaningful impact for the people, causes, and community you love.