Have you heard of the IRA Charitable Rollover? It’s not a dance move, at least not yet, at least as far as I know. That’s worth considering, though. A catchy dance could go viral (like the “Harlem Shake”) and help to spread the word about this cool way to give money to charities.
To be more specific, it’s a cool giving tool for people who are 70½ or older and have an Individual Retirement Account (IRA). Admittedly, that narrows the crowd a bit, but stick with me. If you’re part of Women of the ELCA or an ELCA congregation, there’s a good chance you know many folks who are this age and have retirement savings, even if that’s not you. By learning a little about the IRA Charitable Rollover, you can encourage others to give more to the mission and ministries that matter to them and to you.
Here’s how it works: At age 70½, a person with a traditional IRA must start withdrawing a certain amount of money from the account each year. This is the “minimum required distribution.” It can be hundreds or thousands of dollars, depending on how much money is in the account. The IRS treats these dollars as income subject to tax. If a person needs the money to live on, she can take the cash, pay the tax, and use what’s left.
However, if she doesn’t need the money to live on, she has an incentive to give it to nonprofit organizations and avoid the taxes all together. This is the IRA Charitable Rollover. She simply directs her bank, or whoever holds the IRA, to give (or rollover) that money directly to the charities of her choice. She can do this with up to $100,000 a year from her IRA, with no tax consequences.
Congress renewed the charitable rollover law in January, extending it through 2013. This is a big deal for all of us who care about nonprofit organizations. For instance, an IRA contribution to Women of the ELCA could change lives by supporting Katie’s Fund, grants, scholarships, or any of our ongoing ministries. This is worth talking about – in our newsletters and announcements, on our websites, and in conversations – at least, until the dance video goes viral.
Emma Crossen is director for stewardship and development. For more information about the IRA Charitable Rollover and other cool ways to support ministry, contact Emma at [email protected].