Paul Yeghiayan, CFRE, CSPG
Senior Consultant
Donors 70½ and older can give directly from their IRA without adding to their taxable income. In 2026, this option compares even more favorably with other ways of giving, and donors who give this way are often your best endowment and legacy donor candidates.
This time of year, many donors 73 and older face the same situation. They are required to take money out of their IRA by December 31, and that withdrawal is generally taxable income. That extra income can push them into a higher tax bracket, make more of their Social Security taxable, and raise their Medicare premiums.
For some, the answer is a qualified charitable distribution (QCD). The gift goes directly from an IRA custodian to a qualifying charity of the donor’s choice and, up to the annual limit, does not count as taxable income.
What Changed Tax-wise in 2026 (and What Didn’t)
A QCD works the way it always has. The tax rules around it are what changed.
- Donors 70½ and older can give up to $111,000 in 2026 directly from a traditional IRA. Married couples can give up to $222,000 if both spouses are 70½ or older and each person gives from their own IRA. For donors 73 and older, a QCD can also count toward some or all of that year’s required minimum distribution (RMD).
- Under the 2025 tax law changes, beginning in 2026, itemizers can deduct only the part of their giving above 0.5% of adjusted gross income. For the highest-income filers, each deducted dollar saves at most 35 cents in tax. Non-itemizers get a new deduction of up to $1,000 ($2,000 for joint filers) for cash gifts.
- None of these rules apply to a QCD, because the money is excluded from income rather than deducted.
For example, a single donor who takes the standard deduction withdraws $10,000 as a RMD into their own account and writes a $10,000 check to charity. After the new $1,000 deduction, they still owe income tax on $9,000 of the withdrawal. If the IRA custodian sends the same $10,000 directly to a charity as a QCD, the donor owes no tax on it.
For nonprofits, the opportunity is to make this gift easy and then build on it. Here’s a three-step plan for starting now.
Step 1: Identify Your QCD-Eligible Donors
Many QCD prospects are among your most loyal contributors. Start with a data pull of donors 70½ or older. Where birthdates are missing, graduation year, membership tenure, or philanthropy screening data can often fill the gaps. Then look for these signals within that group:
Past QCD Donors
Look for gifts from IRA custodians such as Fidelity Investments or Vanguard. Contributions from Fidelity Charitable or Vanguard Charitable are donor-advised fund grants, not QCDs.
Consistent Givers
Donors who have given $1,000 or more for five or more years in a row.
Retirement Conversations
Anyone whose contact reports mention retirement, a financial advisor, or their IRA.
Step 2: Explain It Clearly
Many eligible donors have never heard of a QCD or don’t know how to request one. They need to know exactly what to ask their IRA custodian.
Make the Request Easy
Most custodians have a QCD request form, and many accept requests online or by phone. Create a QCD webpage that explains, in plain language, who is eligible, how a QCD helps them, and the December 31 deadline. Include what donors and their advisors will need: your legal name, EIN, mailing address, and step-by-step instructions.
Know Which Gifts Are Coming
Custodian payments sometimes arrive with little donor information. Ask donors to tell you the amount and the custodian ahead of time, and to ask the custodian to include their name with the payment.
Encourage Donors to Start Early
The money must leave the IRA by December 31, and custodians can take a week or more to process requests. Some IRAs let owners write payments directly from the account. Those gifts count only when the funds leave the IRA, so deposit them as soon as they arrive.
Know the Limits
A QCD can’t pay for event tickets, memberships with benefits, or anything else the donor receives in return. If your organization is a supporting organization, it can’t accept QCDs. If you are unsure of your classification, check with your finance office or legal counsel.
Acknowledge Properly
Send a written acknowledgment letter stating that no goods or services were provided. The IRS requires the same acknowledgment information for a QCD as for a deductible gift.
Sample language:
“If you’re 70½ or older, you can give directly from your IRA. A qualified charitable distribution (QCD) isn’t taxed as income, even if you don’t itemize. If you’re 73 or older, a QCD also counts toward your required minimum distribution. Contact your IRA custodian early so the gift leaves your account before December 31.”
This also works as the opening of your QCD webpage.
Step 3: Turn Stewardship into a Legacy Conversation
QCD donors are some of your best endowment and legacy prospects. They’re at least 70½ and already giving to you from their retirement savings. Flag every QCD donor in your database so you can follow up with them later.
The IRA they give from may also be their easiest legacy gift. Naming your organization as an IRA beneficiary usually requires only a form from the custodian, no attorney, and no change to a will. It can also save taxes. Heirs generally pay income tax on what they withdraw from an inherited traditional IRA, and a charity does not.
After the gift arrives:
- Thank the donor promptly and tell them what the gift will do.
- Offer the option of directing future QCDs to your endowment. Since RMDs come every year, a donor can add to an endowed fund each year.
- Invite them to an endowment briefing, a visit with your executive director, or a legacy society gathering.
- When the relationship is ready, ask whether they would consider naming your organization as a beneficiary of their IRA.
Sample language for a January note:
“Thank you for your recent gift from your IRA. Some donors who give this way choose to make their support permanent through an endowed fund, name us as an IRA beneficiary, or do both. If you would like to learn more about these options, we welcome the opportunity to talk with you.”
Finally, track how many QCD donors go on to make a documented legacy commitment. That number shows whether this approach is working.
This is general education. Donors should consult their tax or financial advisor.
Ready to turn QCDs into lasting endowment and legacy support? Contact us and our planned giving experts will help you build a plan sized to your organization.