Introduction
Donors can now contribute their required minimum distribution into a single charity fund. This is a tax-savvy way for individuals to donate to charity directly from their IRA (Individual Retirement Account)—which comes with some great benefits, especially for those 70½ or older.
Here are a few of the tax advantages:
Reduces Taxable Income
A QCD (aka RMD into a Single Charity Fund) is not included in your adjusted gross income (AGI). This can help reduce the impact on things like Social Security taxation and Medicare premiums.Satisfies RMDs (Required Minimum Distributions)
If you're 73 or older (starting in 2023), QCDs count toward your RMD—the amount the IRS requires you to withdraw each year—without increasing your taxable income.No Need to Itemize
Unlike regular charitable donations, which require itemizing to get a deduction, a QCD offers tax benefits even if you take the standard deduction.
How It Works
Clients will need to set up a new account and will need to designate a single charity for granting out of their SCF (hence where the name comes from). This will lock down the giving tab to only show this single charity as eligible for granting.
Setting up a single charity fund for clients with an existing donor advised fund
On the advisor dashboard click Invite Client/Add Account in the top right corner--> Click the client's name in the dropdown--> Click Add Account
For account type, choose Single Charity Fund
Enter the name or EIN for the designated charity--> click Add Account
You will receive a message "invite successfully sent" letting you know that you have successfully created the SCF. Please note that the client WILL NOT ACTUALLY RECEIVE AN INVITE and will need to login to their BlueGive account to confirm their new SCF details
Upon logging in, your client will now see a dropdown in the top left corner with both accounts--> click on the SCF account
Confirm the SCF details. **Very important to ensure that you've chosen the correct designated charity. Once your fund is created, the receiving charity will no longer be able to be changed
Setting up a Single Charity Fund for a client without an existing donor advised fund
You will follow the same steps as above, the only real difference is they will not have the option to toggle between accounts because they do not have an existing DAF account
Contributing to a Single Charity Fund
You'll have the same contribution options as the donor-advised fund, with one additional choice—External Fund Transfer (from IRA).
Follow these steps to contribute from your IRA:
Pull up your SCF account--> click Add Funds on the overview page in the top left corner
Click External Fund Transfer (From IRA)
Enter the IRA provider details and the amount. The right hand side will populate the information you'll need to provide to your IRA provider
You will then see this as a pending contribution within your contribution history
Giving from Your Single Charity Fund
Once your Single Charity Fund is funded, you'll be able to start granting. The granting process works the same way as it does with your DAF, with the only difference being that you’ll only be able to give to your designated charity.
Submitting a One-Time Grant
Making a grant to charity through a single charity fund is a simple and tax-efficient way to give. Here’s how the process works:
Navigate to the Give tab. You will see the charity that you've designated for your single charity fund
Enter the One-time Gift amount, gift date, and enter a Purpose for your grant, which includes many options such as “In honor of”, “Missionary Support”, “Special Project Fund” and many others.
If “Other” is selected, provide a detailed reason for the purpose in which the grant funds should be used.
Ensure the gift is NOT used for personal gain such as:
Tuition
Membership fees
Dues
Admission to charitable events
Goods bought at auction
Organizational pledge
Lobbying
Political contributions
Check the box if you would like to give your grant anonymously, otherwise, your fund name and e-mail address will be provided to the grantee.
Check the box to certify that the grant submission meets the Blue Trust Program Guidelines.
Once submitted, your grant will go into the pending state while it is reviewed. Navigate to the Grant History to view the status and timeline for your grant.