Since 1974, millions of Americans have saved billions of pre-tax dollars in Individual Retirement Accounts (IRAs).  Thanks to continued savings and investment returns, an estimated $3.6 trillion currently is invested in IRAs.  H.R. 1424 signed by President Bush allows IRA owners to share the wealth of their retirement savings by giving directly to charity—without first counting it as income and paying income tax.

As you know, thanks to decades of deliberate saving and favorable investment returns, a substantial share of today’s retirees have more money in their IRAs than they’ll ever need.  Many have expressed an interest in giving the funds to charity, but income tax must be paid on all withdrawals. This reduces the value of the gift.  Others have asked about designating their children as beneficiaries, but that may draw additional tax consequences.

A provision in H.R. 1424 creates a new option:  transferring IRA assets directly to charity.  By going directly to charity, the money is not included in the IRA owner’s income and—most importantly—is not taxed, preserving the full amount for charitable purposes.  The law covers all gifts made this year and next.

In 2008 and 2009, traditional IRA-holders who are at least 70-½ years old can make direct charitable transfers up to $100,000 per year.  As a qualified public charity, The Dayton Foundation can help donors execute the transfers and choose from several charitable fund options for their gift.  Donor-advised funds do not qualify for tax-free IRA transfers, although scholarship funds, most designated funds, field-of-interest funds and unrestricted funds do qualify.  The Dayton Foundation can assist any eligible candidate find the right charitable vehicle to meet their philanthropic desires.

Having more retirement money than you need is a great problem to have, and one that’s now easier to solve.  But generous IRA donors still face multiple options for their gift:  Support the entire community?  Underwrite a special cause?  Shore up a favorite charity?  The following are three charitable options available to 70-½ year olds who have IRAs.

The Dayton Foundation is unique in the range and depth of services that we offer people and organizations who want to give to charity today or in the future and make a lasting difference. The Dayton Foundation offers trusted, local expertise and the personalized service you need to create a charitable legacy in which you can take genuine pride.

For people who care deeply about their community and its people, this fund is an excellent way to address our most pressing needs, today and tomorrow.

For those who are particularly passionate about a single cause, Field-of-Interest Funds provide strategic, lasting support—even as needs change over time.

For people who want to help secure the future of their favorite charity, our endowed Designated Funds give not-for-profits a steady stream of income, plus planned giving and investment management services.

For assistance in meeting your charitable goals, please contact: