Giving to CAI through your IRA is as easy as
by Sonja Bahr
Trying to understand philanthropic giving , retirement fund requirements , and tax deductions can feel overwhelming . But making a donation to Central Asia Institute through your individual retirement account ( IRA ) is easy , can save you money on taxes , and , most importantly , will help provide education for girls and women living in the regions we serve .
Why consider making a donation through your IRA ?
• If you are 70½ years of age or older , you can make a tax-free transfer directly to CAI from your IRA . Starting in the year you turn 72 , you can use this gift to fulfill all or part of your required minimum distributions ( RMDs ).
• When the transfer is made directly from your IRA to CAI , you are not required to pay income taxes on the funds , even if you do not itemize your deductions .
“ Contributing to CAI from my IRA account was easy . It is a total win / win way to donate . The withdrawal of funds satisfies all or part of my required minimum distribution , and it is not reported as taxable income for me . I love it when things are easy , I accomplish something worthwhile , and it ’ s nontaxable . What could be better than that ?” - Claire , CAI donor for nine years
FREQUENTLY USED TERMS CHEAT SHEET
Individual retirement account ( IRA ) An account set up at a financial institution that allows individuals to save for retirement with tax-free growth or on a tax-deferred basis .
Qualified charitable distribution ( QCD ) An otherwise taxable distribution from an IRA owned by an individual who is age 70½ or older that is paid directly from the IRA to a qualified charity .
Required minimum distribution ( RMD ) The smallest amount you are required to withdraw from your tax-deferred retirement accounts every year after a certain age .
Growing up , Barbara ’ s parents encouraged her to be frugal with her money . But when her mom stepped in to support an impoverished family in Colombia who she had never met , Barbara learned another important lesson . Each week , her mother sent money for the family to buy food , and Barbara went from feeling overwhelmed by heartbreaking poverty to witnessing how one person — her mother — was making a profound difference in the lives of others . Barbara carried that lesson with her all her life , and after learning about CAI ’ s mission , felt as though she had found a way to give back as an adult .
“ CAI ’ s efforts make a difference in the lives of people who I will never meet . … I feel grateful to know my economic privilege can be such a powerful tool for good . My parents taught me to be careful with my money , and I have a secure retirement . So when I needed to start taking the required minimum distribution from my IRA , I was dismayed to learn that it would likely push us into a different tax bracket . Fortunately , if I give that money away directly through my IRA , I don ’ t have any negative tax consequences . At tax time , I report the RMD and that it was a qualified charitable distribution . Go ahead . Use your retirement account to make the world a better place . Your mom will be proud .” -Barbara , CAI donor for 11 years
30 | JOURNEY OF HOPE CENTRAL ASIA INSTITUTE