Charitable Strategies to Help Your Clients: CICF’s new funds for charitable gifts of IRA rollovers provide ease and flexibility for those 70½ and older

by Sarah Weaver, JD,
senior gift planning advisor at CICF

CICF recently launched two new types of funds specifically for charitable gifts of IRA rollovers. If you have clients who are at least 70½, they are eligible to transfer up to $100,000, or up to $200,000 for a married couple, of their IRA assets directly to a qualified public charity. Since the transferred assets are not recognized as income, their donation will not trigger federal income tax obligations today or estate tax obligations in the future.

At CICF, clients have many options for their charitable IRA rollovers:

1. A single-purpose designated fund allows donors not only to benefit a charity of their choice but also to control the timing and the amount of distributions to the chosen nonprofit on an ongoing basis. This is an excellent option for your clients to “pre-fund” gifts they know they will make at a later date, such as during a capital campaign or for a specific program. Donors can even restrict their gifts for a specific use by the chosen charity. This single-purpose designated fund is a “pass-through fund,” meaning that the entire fund balance is available for distribution.
2. If your clients want to support a number of charities with their IRA rollover, CICF can help them with a different type of designated fund. When the client provides a schedule of the charities, including the amounts to be distributed and the timing of those distributions, at the time of funding, he or she is able to benefit multiple charities with the IRA rollover. This is a good option when one or more of your client’s chosen charities are unwilling or unable to accept an IRA rollover, which can be more complicated. This designated fund is also a pass-through fund.
3. As you may already know, your clients can create a traditional donor-designated endowment fund or donor field-of-interest endowment fund if there are organizations and/or causes they would like to benefit in perpetuity. Distributions from endowment funds are limited to 5% of the fund balance annually.
4. As always, your clients can make their charitable IRA rollover directly to the Community Endowment Fund for CICF, The Indianapolis Foundation, or Legacy Fund to ensure that their gift helps to address the most critical unmet needs in their community.

All of the fund types that can accept a charitable IRA rollover are assessed a 1% tiered administrative fee, the lowest fee assessed by CICF.

When working with your clients to make a charitable gift through their IRA rollover, there are a number of things to keep in mind:

1. Only IRA withdrawals qualify for charitable IRA rollover treatment. They cannot come from any other type of retirement plan, nor do they qualify for any additional charitable deduction.
2. Charitable IRA rollovers cannot be made to donor-advised funds, charitable gift annuities, or charitable remainder trusts, nor do they apply to private foundations or supporting organizations.
3. Although the minimum fund balance to create any of the designated fund types or a field-of-interest fund with a charitable IRA rollover is $25,000, your client can make a gift of any size with a charitable IRA rollover to the Community Endowment Fund for CICF, The Indianapolis Foundation, or Legacy Fund.
4. Transfers must be made directly from IRA administrators to qualified public charities, such as CICF.

If you have clients interested in exploring philanthropic options for their IRA assets, call Mary Stanley, director of gift planning and legal affairs, at marys@cicf.org or 317.634.2423 x319 or Sarah Weaver, senior gift planning advisor, at sarahw@cicf.org or 317.634.2423 x510.