Lessons in Wise Living and Giving

I recently had the great pleasure of catching up with Dennis Urbaniak. Dennis and his wife, Amy, are lovely examples of people who spend their lives to bring glory to Jesus. In their retirement, the Urbaniaks honor Christ with their time and with their resources.

As an example of how they spend their time, the Urbaniaks have just returned from six weeks of mission work helping to prepare a translation of the Bible in symbolic, universal language for publication. This translation is intended to enable those who are illiterate, deaf and/or blind to access the word of God.

As an example of how they steward their resources, earlier this year Dennis and Amy each established a Single Charity Fund (SCF) at The Generosity Trust. I asked Dennis why he and Amy chose to establish SCFs. Dennis said establishing SCFs at The Generosity Trust enabled them to make charitable distributions from their IRAs directly to the SCFs. Once the distribution is deposited into the SCF, they may direct the amounts and timing of grants from the SCF to the charity they established each SCF to benefit. Because the SCFs are held at The Generosity Trust, which is a public charity, and because the distributions from their IRAs were made directly to the SCFs, the distributions from Dennis and Amy’s IRAs are considered qualified charitable distributions (QCDs). This use of SCFs reduces Dennis and Amy’s taxable income and can satisfy their required minimum distributions (RMDs). Dennis reported that opening and funding the SCFs at The Generosity Trust was a “seamless process.”

To generally unpack the terminology in the prior paragraph just a bit:

• An RMD is the minimum amount that must be withdrawn from an IRA after age 73. RMDs are considered income and are taxed at the IRA owner’s income tax rate.
• A QCD is a distribution an individual over age 70½ may direct the custodian of his or her IRA to make directly from the IRA to a qualified charity. A QCD is not reported as income and can satisfy RMDs up to $108,000 per person per tax year.
• An SCF is a fund eligible to receive QCDs that is established by an individual to benefit one specific charity. The individual who established the SCF may serve as the advisor for the fund and direct the amounts and timing of distributions from the fund.

If you are interested in exploring ways The Generosity Trust may partner with you to facilitate your QCDs, please reach out and we would be happy to discuss with you.

I am encouraged by Dennis and Amy’s examples. They have been given good gifts from the Father of the heavenly lights and have served others by giving of those gifts – in so doing, their light shines before men who see their good works and give glory to the Father in heaven. Let us all shine brightly!

This article is not intended as legal or tax advice. Please consult your individual tax planning and tax preparation professionals to assist you with regard to your specific QCD vs RMD strategy.

– Stephany Pedigo, Director of Family and Business Philanthropy