There are many opportunities available for people who wish to donate to a 501(c)(3) charity. You can donate all or just a portion of your IRA during your life or as part of your final will. Many nonprofit organizations depend a great deal upon donations such as those of and from IRAs for organizational financial sustainability.
Step 1
Talk to your financial adviser or administrator to discover what options are available to you. Discuss with this person what your financial goals are, how you would like to donate your funds and any concerns you may have.
Step 2
Take your time to thoroughly research potential charities you are interested in donating to. Narrow them down to a short list. Make sure that the organizations you are interested in donating to have proper 501(c)(3) status from the IRS (as not all organizations seeking donations have this status). Contact the IRS if you are unsure of a particular nonprofit organization's legitimacy.
Step 3
Contact the brokerage firm that holds your IRA to request a charitable donation form.
Step 4
Record the name of the charity you would like to donate to, as well as the percentage of money you would like to donate to it. If you wish to donate to more than one nonprofit organization, list each one and break down the percentage of funds or amounts that you would like to distribute.
Step 5
Make sure your broker arranges to transfer the amount you have specified at the time you specify. You can specific a written cashier's check or a wire transfer.
Step 6
Update your will to include instructions on how you would like your IRA to be donated following your death so that parts of your funds will go to charities you have selected. Discuss your IRA donation plans with appropriate members of your family.
Step 7
Write to the charity you have donated to informing them of your gift since the money will not pass through you.
Tips and Warnings
- Request a confirmation letter from the charity. Ask the organization to state that they are public and thus able to legally receive qualified IRA donations. Also ask the charity to verify the amount they received from you. There are certain limitations for qualified charitable donations, which include donating no more than $100,000 each year and that you are at least 70.5 years old when your donation is made. Follow these limitations to decrease the amount you owe in taxes. Not all organizations are eligible to receive IRA donations. Check on the eligibility of your designated organization(s) before you set up an IRA donation. If you are unsure about the legality of donating your IRA, make sure to consult an accountant or lawyer to help clear up some of the concerns or questions you might have.
