2236 Qualified Charitable Distribution

(IRA Charitable Rollover)

Document purpose

To accommodate the needs of donors who wish to contribute to the University through qualified charitable distributions (QCDs) from an IRA account. To identify and address relevant legal and tax issues associated with QCDs.

effective

October, 2010

Reviewed

June, 2020

Responsible Office

Treasurer

Approval

Treasurer

Policy

A donor may wish to make a charitable donation to the University by directing a distribution from the donor’s IRA to the University. Donors eligible under federal tax law may use the IRA charitable rollover to make a QCD. Donors should be advised to consult their tax advisors about these rules and their specific situations and to confirm tax treatment of QCDs under their state and local tax rules.  

A QCD must be completed by December 31 of the year in which the IRA owner intends to make the QCD. Further, the IRA account must make the distribution directly to the charity. This direct distribution can be made either by making a request to the IRA Administrator for a direct electronic transfer or by using a check titled in the name of the IRA.  

CHARITABLE PURPOSES  

All QCDs to the University must be made for charitable purposes. For example, a gift for the specific benefit of a designated person (e.g. a care or service provider, student, faculty member or volunteer) is prohibited.  

CONDITIONS ON GIFTS QCDs may be received by the University subject to certain conditions as recommended by the  donor and agreed by the University. A donor may also recommend, and the University may agree, that QCD gifts will be paid out over multiple years.  

GIFTS USED INTERNATIONALLY  

QCDs can be accepted for University projects that are carried on in other countries. However, a QCD cannot be made to any non-US University entity or affiliate.   

GUIDELINES FOR EVENTS & MEMBERSHIPS  

Under federal tax law, a QCD cannot result in benefits, goods, or services to the donor, members of their families, businesses they control, or any other related parties (these are typically called “personal benefits”). Prohibited benefits generally include tickets, memberships, event tickets, meals, sponsorships, registration fees, preferred parking, preferred seating, discounted merchandise or other preferential treatment from the University. Failure to observe this restriction can subject the University and the donor to tax penalties. The University has established the following specific guidelines for events and memberships:  

Events  

Consistent with federal tax law, the University does not permit donors to use a QCD to fund all or any portion of the purchase price of a table or ticket for an event when the table/ticket purchase comprises both a tax-deductible portion and a non-tax deductible (personal benefit) portion, even if the donor wishes to pay the non-deductible portion from a personal source.  

Memberships  

To comply with federal tax law, QCDs for membership fees within the University will be accepted only if:  

  1. The membership benefits are limited to incidental benefits defined under then-current IRS rules. Current examples include free or discounted admission to low-cost events, parking, preferred access, and attendance at certain members-only events; or 
  2. The donor waives and declines all the non-deductible personal benefits, assuming that the membership offers, and can implement, the option to waive and decline such personal benefits.

GUIDELINES FOR PLEDGES  

Consistent with federal tax law, the University can accept a QCD to satisfy all or any portion of a personal pledge or other financial obligation of the donor.  

RECEIPTS  

Upon receiving a QCD, the University will send a special gift acknowledgement to the donor providing the date of the QCD and stating that: (1) no goods or services were provided in exchange for the QCD; (2) the University is a qualified public charity and therefore may receive the QCD; and (3) the QCD is a gift to the University for general purposes or to a designated fund, and not to a donor advised fund or a supporting organization.