Tax Savvy Donors Tell How An IRA Gift Benefits Them And United Way

By: Lynn Lohr

Kathy and Mike, long-time United Way supporters, are making their first Qualified Charitable Distribution (QCD) ever this holiday season. They’ve chosen to write a sizable check directly from Kathy’s IRA to United Way Bay Area. The two Alameda residents have many reasons for making that decision.

Starting in the 1980s, the couple became faithful donors to United Way at their respective workplaces. Bank of America and Hewlett Packard gave them “a painless way to donate a set amount from every paycheck.” “We’re numbers people,” Mike laughed, “And we liked the numbers United Way represents—the families helped, the high percentage of the gift that actually goes to the people in need, the breadth of the organizations served.”

Upon retiring from their IT jobs about ten years ago, the pair didn’t lose their motivation to “help people that want to have dignity and want to achieve it themselves.” They worry about the folks edged out by a super-hot rental market. “We drive by and see the tents along the underpasses. United Way also advocates on behalf of people trying to make it in the Bay Area economy.”

Kathy still works part-time each tax season preparing returns, so she’s keenly aware of the benefits a QCD written directly from an IRA offers. “On turning 70 and a half you’re required to take a distribution from your IRA every year. Using that distribution to make a charitable contribution lowers your adjusted gross income, which is to your advantage. Some of us don’t have as many ways to reduce our tax bill, especially if our homes are paid off. This is a good way. Plus, you can feel comfortable about giving more.” Kathy became eligible this October 31st and after she makes this gift, she plans to coach her older sister on how to do it.

It’s all in the family. Mike and Kathy grew up in Illinois and Maryland and watched their parents give generously of their time as volunteers and also give what money they could to charity. Proud of this tradition, Mike said, “Those of us who are fortunate have a responsibility to help and the United Way makes it easy.” Kathy added with a chuckle, “And you could lower your taxes at the same time!”

Wondering what to do with that mandatory distribution from your IRA? Contact Lisa Simons and she’ll walk you through the QCD process (lsimons@uwba.org or (408) 345-4314). You’ll find out what Kathy and Mike have discovered—there are many reasons and many ways to give to the United Way.

Click here to get an idea of how a QCD might benefit you.

share this post: