News > Planning Your Year-End Giving

Planning Your Year-End Giving

Posted: October 22, 2024

Often our church members wait until the end of the year to carry out the bulk of their annual giving. This can be for a variety of reasons and allows donors to engage in stewardship with a full understanding of their annual income and means to give. These year-end gifts make up a significant portion of annual donations for many charitable organizations and enable proper planning and work streams for the upcoming year. In the church, these gifts are part of practicing the spiritual discipline of giving. 

And it’s no coincidence most donations come towards the year’s end, especially for those 72 or older who are required to take some distribution from their IRA accounts to avoid IRS tax penalties. For donors over 72, a piece of the puzzle is reconciling their need to take the IRS mandated “Required Minimum Distribution” (often referred to as your RMD) with their desired charitable giving. Your RMD is a portion of your IRA savings account which must be withdrawn annually once you have passed the age of 72. The amount required to be withdrawn is unique to each person’s financial position and type of IRA account and can be calculated with the help of your Retirement Plan Administrator or by using an IRS calculator.  If you have reached this time of year without taking your RMD from your IRA account, now is the time to consider what and how much to withdraw and what to do with those funds. 

One way to maximize your donation’s impact and alleviate your tax burden is to direct all or a portion of the RMD amount to your church or favorite charitable organization. This will lower your taxable income and count towards your RMD amount.This can be the perfect opportunity to give to your church or favorite charitable organization, but it is crucial to understand the proper way to donate these funds to avoid tax penalties. The most important thing to know is these gifts must come directly from your IRA to your church or other charitable organization; they cannot be distributed to you directly as this will trigger a taxable income event. The simplest way to handle this will be to contact your Retirement Plan administrator and have them direct the distribution to its intended recipient. 

Planning a year end gift? Please take a moment to consider donating to your church during this decisive time for our ministries. If you have questions or want to better understand your options for directing IRA funds, reach out to Brett Lokhorst at the Georgia United Methodist Foundation by phone (770-449-6726) or email blokhorst@gumf.org.

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