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  • 1.  IRA Rollovers-Planned Giving?

    Posted 09-29-2023 09:47 AM

    Good morning.  Our Planned Giving office handles IRA Rollovers and I was wondering if that is the norm for others or most institutions?  Is there any reason that Planned Giving is best suited to handle IRA Rollovers?  Can they be handled and processed as any other gift (with exception to special receipting - acknowledgement requirement)?



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    Dena Toth
    Medical University of South Carolina Foundation
    tothd@musc.edu
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  • 2.  RE: IRA Rollovers-Planned Giving?

    Posted 09-29-2023 09:56 AM
    These really are not "planned gifts" in the strictest sense. A planned gift is established "today," providing a tax deduction to the donor - but where you will not receive anything for many years.

    IRSs are individual retirement accounts. Put another way, they are savings accounts where taxes are deferred. But the assets belong to the donor, and they can choose to make distributions to whomever and whenever (based on IRS allowances) they want.

    An RMD is straight-out cash that belongs to the individual. There's zero need for those to go through planned giving.

    QCDs are a bit more complicated because recent laws allow up to $50,000 of a QCD to fund a CGA. However, absent that, they are also outright cash donations - NOT planned gifts. Granted, they are tax-free withdrawals from the IRA, but they still require a basic gift receipt and NOT a planned gift receipt that reflects face and present values.

    John


    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




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  • 3.  RE: IRA Rollovers-Planned Giving?

    Posted 09-29-2023 10:26 AM

    All true.

     

    That having been said, my experience is that, especially in small shops, the Gift Planning Officer is the person most likely to understand the nature of these transactions and be able to shepherd them correctly (I even knew an organization where the Gift Planning Officer had oversight of all gifts of securities, for more or less the same reason!).  And I suppose that knowing that a donor has significant retirement assets might function as a lead....

     

    There's no reason that these transactions need to involve the Planned Giving staff, as long as others understand these gifts (which is itself a good thing!).  Attending to such gifts probably means marginally less time for Planned Giving staff to devote to their primary responsibilities.  But there's nothing particularly wrong with it, especially in smaller organizations where the Planned Giving staff have the deepest reservoir of relevant expertise.

     

    My US$0.02 worth; the usual disclaimers apply.

     

    Good luck!

    Alan

     

    Alan S. Hejnal (he/him)

    Data Quality Manager

     

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