The rising popularity of the Qualified Charitable Deduction (QCD) appears to be inspiring an increasing number of retirees to re-evaluate their philanthropic plans. Before the clock winds down on 2023 giving opportunities, be sure you’re familiar with the various charitable giving techniques that are most appealing to retirees and the various ways the Omaha Community Foundation can help.
Here are four characteristics of retirees and their charitable giving situations that will help you serve your retired clients.
Greater connection to community. Retirees often feel a greater connection to their community and favorite nonprofits than your clients who are not retired. Whether it’s because a retiree’s income and corresponding giving capacity are more predictable, or because a retiree has more time, getting involved with favorite nonprofits can help retirees stay active and even avoid loneliness. Our team Omaha Community Foundation stays connected with local organizations, and we are happy to provide information or answer questions for your clients who want more on information on community needs or want to get involved with nonprofits that share their values.
Less likely to itemize deductions. Many retirees apply the standard deduction on their income tax returns because they don’t have many expenses that qualify for itemization, such as business expenses and mortgage interest deductions. Help your retired clients evaluate whether itemizing deductions in certain years could be beneficial. Through a Donor Advised Fund at OCF, your clients may be able to concentrate charitable contributions, often called charitable bunching, into particular tax years and benefit from the deductions above and beyond the standard deduction. A DAF can help your client take advantage of itemizing tax deductions while still allowing them to provide steady support to nonprofits in years that follow the itemizing year.
More interested in involving children and grandchildren in their philanthropy. OCF is happy to help your clients fulfill their desire to stay connected with their children and grandchildren, including formalizing roles for these family members as advisors and successor advisors of the retiree’s fund at the Omaha Community Foundation. This is often an excellent and easy way to structure philanthropic priorities for the next generations as well as create positive, authentic communication channels across an extended family.
Excellent candidates for Qualified Charitable Distributions. Your clients who are at least age 70½ can direct a tax-free distribution (up to $100,000 per spouse in 2023) from an IRA to a qualified charity such as a Field Of Interest or Designated Fund at the community foundation. For your clients who must take Required Minimum Distributions (RMDs), the Qualified Charitable Distribution (QCD) is especially beneficial. This is because the distribution to charity counts toward the RMDs and therefore never lands in the client’s taxable income.
When your client is making a life change – reaching retirement, deciding to donate cash or assets, or wants to discuss their legacy gifts – reach out to our Donor Services Team to discuss how we can best support you and your client.