Your clients’ retirement and charitable giving plans are even sweeter with QCD options

For professional advisors, developments related to a Qualified Charitable Distribution (QCD) are worth watching closely. QCDs increasingly serve as a natural connector among retirement planning, philanthropy and legacy conversations. Just as importantly, QCD discussions often open the door to broader planning opportunities, helping clients align financial goals with the causes and communities they care about most. 

You’ve no doubt noticed that continue to gain traction as one of the most practical and effective charitable planning tools for your clients over age 70 ½.

For many clients—especially those who do not itemize deductions—a QCD is particularly appealing. By allowing eligible clients to transfer funds directly from an IRA to a qualified charity without recognizing the distribution as taxable income, QCDs can help reduce adjusted gross income while supporting charitable priorities. 

What’s especially notable is that in recent years, Congress has expanded planning opportunities by indexing annual giving limits for inflation ($111,000 per person in 2026) and allowing certain one-time QCDs, also known as “Legacy IRAs,” to fund charitable gift annuities and charitable remainder trusts. Now, proposed legislation known as the Charity Parity Act would extend QCD treatment beyond IRAs to include employer-sponsored retirement plans such as 401(k)s, 403(b)s and 457(b)s. This potential change in the law would remove the extra step of rolling assets into an IRA before making a charitable gift, simplifying the process for many clients whose retirement savings remain primarily in workplace plans.

Consider this scenario: Your client, age 74, is taking Required Minimum Distributions (RMD) from a traditional IRA. Because the client claims the standard deduction, charitable gifts do not generate additional tax savings. By instead directing a portion of the RMD to a qualified charity as a QCD, the client can satisfy part or all of the RMD obligation without increasing taxable income. In many cases, this can also reduce Medicare premium surcharges and lessen the taxation of Social Security benefits, creating planning advantages beyond the charitable deduction itself.

Here are three examples of how Stark Community Foundation can help your client achieve charitable goals through QCDs:

     1. A client directs a QCD from an IRA to Stark Community Foundation to support broad community needs. The client satisfies part or all of the their annual RMD requirements while supporting flexible grantmaking that addresses changing priorities in our community.

     2. A client uses a QCD to contribute to a Field of Interest Fund at Stark Community Foundation focused on causes such as education, healthcare, the arts or environmental conservation. This allows the client to support a specific passion area while relying on Stark Community Foundation’s expertise to identify effective nonprofit organizations over time.

     3. A client makes a QCD to an existing Designated Fund or Scholarship Fund at Stark Community Foundation. They may choose to support their favorite local nonprofit or help students pursue higher education, all while reducing taxable income through a QCD.

Keep in mind that charitable giving with IRAs goes beyond current gifts to charity. An important part of advising clients about their IRAs is checking their beneficiary designations. Not only is it tax advantageous for a client to designate a fund at Stark Community Foundation as the beneficiary of an IRA, but uncomplicating a retirement plan beneficiary designation can help avoid potential issues that could come up in the future. 

Learn more about the ways Stark Community Foundation can assist with effective philanthropy strategies. We are here to help as you work with your clients to achieve their charitable goals.

*This post is provided for informational purposes only, and is not intended as legal, accounting or financial planning advice.