ELCA Foundation insights February 2022

News and information from the ELCA Foundation

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Welcome to another issue — and another year — of “Insights,” the ELCA Foundation’s quarterly newsletter. We’re so grateful for this opportunity to share helpful news and information as you consider how you want your charitable giving to make a lasting impact for generations to come.

In this issue, you’ll learn more about giving gifts from your retirement accounts and how the ELCA Foundation can partner with you to maximize the impact those gifts have on the ministries you care about most. You’re also invited to join our next webinar, which will focus on the requirements and benefits of qualified charitable distributions.

As your regional gift planner, I’m here to partner with you to ensure that your charitable giving aligns with your passion and purpose. My services are available to you without cost or obligation; it is my ministry to be of service! Please contact me at any time.

GIVING GIFTS FROM RETIREMENT ACCOUNTS

Giving a gift from a tax-deferred retirement account can be one of the most tax-efficient ways to be charitable both during your lifetime and through your estate. Unlike a distribution to you or an heir, which would be a taxable event, charitable donations from retirement accounts lay no additional tax burden on you or the charity. Estate gifts from these accounts can go directly to charities through a donor-directed distribution agreement or fund named endowments, or they can provide future income to heirs through charitable remainder trusts.

Giving an estate gift from your retirement account can be as simple as updating your account beneficiaries. Did you know that you can list a charity alongside your family as a partial recipient of your account? For example, an individual donor with two children may choose to leave 45% of their retirement account to each child and the remaining 10% to charity. Many donors choose to give a portion of their tax-deferred retirement account to charity because these funds will become taxable income to their family whereas other assets may be inherited with a smaller tax burden.

A donor-directed distribution agreement — administered by the ELCA Foundation — further simplifies the process of giving to multiple charities, allowing you to list one beneficiary and to partner with us in making distributions to your selected ministries.

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I’M 72, NOW WHAT?

When you turn 72, you’re required to accept taxable payments from your tax-deferred retirement account, and navigating these requirements can be confusing. In recent years these distributions have been affected by several new pieces of legislation including the SECURE Act, the CARES Act and updates to required minimum distribution rates.

Many charitable donors find themselves in a position of taking distributions while continuing to make gifts to charity out of their banking accounts. By contrast, making distributions directly from an IRA can be a win-win, both in supporting ministry and reducing taxable income. These distributions, known as qualified charitable distributions (QCDs), are given during your lifetime and are typically made directly from an IRA account to the charity.

The ELCA Foundation is here to help you as you make important decisions about your charitable giving practices. We invite you to join us for a 30-minute webinar on Friday, Feb. 25, at 12 p.m. Central to learn more about QCDs: who can make them, at what age they can be made, and what they can be used to support.

MINISTRY GROWTH FUND

Designed specifically for congregations, synods, seminaries and other affiliates of the ELCA, the Ministry Growth Fund is a long-term, stable and socially responsible endowment fund that provides distributions to grow ministry, now and well into the future. Individuals may participate in the fund by opening a named endowment or donor-advised fund. Learn more.

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