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Remember the IRA Rollover During Giving Season

We are entering what is often called the “Giving Season.” December and the holidays often bring out the best in peoples’ philanthropic tendencies (altruism and tax breaks are behind this seasonal phenomenon!). It is important for your school or community foundation to participate in this by sending out solicitations to support your organization.  The IRA Rollover opportunity is a convenient tool for many people over the age of 70.5, who have an established IRA account, to give over the next month.

Eligible donors may donate up to $100,000 annually from their IRA to any charitable organization. Small gifts are permissible, too; and you should note that many people have the ability to make gifts in the $500 to $5,000 range from their IRAs. The IRA Rollover, good until the end of the year, allows donors to gift from their IRA fund without paying taxes on the distribution.

The IRA Rollover opportunity is particularly relevant in any rural areas, where farmers and small business owners often have substantial IRAs.  Tax advice should always be left to a potential donor's professional advisory, but it is important to note that distributing IRA funds before death is a generally accepted estate planning strategy.

The ideal strategy for a seasonal giving effort is as follows:

1.  Send personal, introductory letter, making the case for your school foundation and letting the potential donor you will be following up soon.
2.  Call the donor shortly after they receive the letter and ask for an opportunity to meet with them.
3.  Have a gift "range" in mind before asking.  Often, an example or two from school foundation board members is helpful.
4.  Two people should be involved in asking; ideally they should be school foundation board members, who already have made a commitment to the seasonal giving campaign.
5.  Regardless of the potential donor's response, always follow up with a nice handwritten thank you note.

Click here for some more specifics on IRA rollovers, the current provisions for which are effective through December 31, 2011.