IRAs, QCDs, and You - Sacramento Region Community Foundation

An individual retirement account, commonly known as an IRA, is a great option to save for retirement and make tax-deferred investments.

If you own an IRA and are 70 ½ years or older, you can transfer up to $108,000 to charitable organizations tax-free every year. These transfers are called qualified charitable distributions, referred to as QCDs, and are a simple way to benefit causes that matter most to you and receive tax benefits in return. Additionally, if you are 73 years or older, QCDs count toward your required minimum distribution, or RMD, for the year.

Common Definitions

Individual Retirement Account (IRA): A tax-favored personal savings arrangement, which allows you to set aside money for retirement. There are several different types of IRAs, including traditional IRAs and Roth IRAs. You can set up an IRA with a bank, insurance company, or other financial institution.

Qualified Charitable Distribution (QCD): A tax-free transfer of funds from an IRA to a qualified charity.

Required Minimum Distribution (RMD): The minimum amount you must withdraw from your retirement accounts each year once you hit a certain age.

You can make a tax-free QCD through your IRA directly to your charitable fund at the Sacramento Region Community Foundation. Although these distributions are not deductible as charitable contributions on your income tax return, they impact your taxes because they are not treated as taxable income to you.

Donors can take advantage of several creative ways to direct their QCD by giving to the Foundation through their IRAs.

Use your QCD to support nonprofits during Big Day of Giving.
Donate to one of our many Nonprofit Funds or other types of charitable funds.
Establish a new fund that can accept QCDs, such as a Scholarship or a Field of Interest fund.

Unfortunately, Donor Advised Funds (DAFs) cannot accept QCDs. However, our Donor Advised fundholders have utilized these alternatives to direct their QCD through the Foundation. Please contact our team to discuss these options.

If you make a gift from your IRA to the Sacramento Region Community Foundation, please have your IRA custodian send a distribution check directly to the Foundation, or you can write us a check from your IRA checkbook. It is important that the check is made out to the Foundation so that it does not count as income tax to you. If you wish for your gift to support a specific charitable fund, please note the fund name on the check if possible. Otherwise, reach out to our team for assistance.

Why should I take advantage of QCDs?

It’s tax-free.
It can satisfy all or part of your RMD.

What’s required to make a QCD to a charitable fund at the Foundation?

You must be 70 ½ or older at the time of distribution.
Total distribution cannot exceed $108,000 in 2025.
Distribution must come directly from your IRA custodian to the Sacramento Region Community Foundation, or you may write a check payable from your IRA checkbook. Please consult with our team so we understand your intent and can ensure your donation is deposited into the correct charitable fund.

What if I want to use a QCD for Big Day of Giving?

To make a QCD to a nonprofit for Big Day of Giving, follow these steps:

Have your IRA custodian send a check directly to the Sacramento Region Community Foundation or write a check payable from your IRA checkbook. The Foundation would like to have your check in-hand by the day before Big Day of Giving, April 30.
Provide Foundation staff with a list of the organizations you wish to support during Big Day of Giving and how much each organization should receive.
Foundation staff will divide your check amongst your selected organizations, and your gifts will count towards their Big Day of Giving totals.

Can I use my 401K to receive a QCD?

QCDs are specific to IRAs. If you do not have an IRA, you may be able to roll assets from a pension, profit sharing, 401(k) or 403(b) plan into an IRA and then make the transfer from the IRA directly to the Foundation.

Before proceeding with distributions from your IRA, please consult with your professional advisors to discuss your giving goals and how IRA distributions may impact your personal finances.

Donors can take advantage of several creative ways to direct their QCD by giving to the Foundation through their IRAs.