About A.C. Fitzgerald

A.C. Fitzgerald & Associates is a national consulting firm providing business solutions for charities and other nonprofit organizations. Our principal goal is to help client organizations achieve their vision by developing strategies to increase income and effectiveness.

Featured Products

100 Tips, Techniques and Templates for Persuasive Proposal Writing
Buy Now
Taking Advantage of a New IRA Provision for Charitable Gifts
 
 

October 24, 2006                                                                                                                    Volume 1, Number 5

In This Issue

  • A New IRA Provision for Charitable Gifts
  • Today's Tip
  • Ask Ann
  • Sources for Success

Contact Us

AC Fitzgerald & Associates, LLC

Ann C. Fitzgerald, President
www.acfitzgerald.com
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
703-528-3310

To unsubscribe:

Please reply to this e-mail with "unsubscribe" in the subject line.

Taking Advantage of a New IRA Provision for Charitable Gifts

The Pension Protection Act of 2006 makes permanent a number of tax rules passed in 2001, but originally set to expire in 2010. It also offers a provision that allows individuals who are 70 ½ or older to contribute money from an IRA directly to a tax-exempt charity.  If the distributions are made in 2006 or 2007, they are federal income tax free.

Why is this important?  People 70 ½ or older must take a required (taxable) minimum distribution from their IRA account each year.  So if they don’t need the income, this new provision allows them to make a contribution with those withdrawals without tax obligation.

How can our organization take advantage of it?

  • Talk to your tax advisor to understand all the details of the provision and how to accept these gifts.
  • Educate your donors about the tax benefits in your newsletter, on your website, and in other donor communications.
  • Search your donor database and, if possible, segment out donors who are near the age of 70 ½ or older. Consider sending them a special, personalized letter.
  • Ask donors who have already made charitable gifts in 2006 to consider making their 2007 donations this year and accelerating their 2008 gifts to 2007.
  • Inform everyone in your organization who has contact with donors.
Today's Tip: Communicating to Your Donors

When communicating to your donors about the IRA provision, make sure to emphasize more than just the tax benefits of a special gift. Remember, the number one reason that donors give in the first place is a belief in the cause.  In your communications, explain how donors can both take advantage of this tax benefit while, at the same time, help your organization acheive its vision.

Ask Ann
Dear Ann: I’m meeting with a prospective donor with whom I’ve built a relationship and explained why our organization is worthy of a contribution. How do I come up with an amount and actually phrase the request for a donation? -- Rebecca

 Answer:  I’ll answer this question by suggesting that you do two things: (1) Research as much as possible about the donor to learn more about his/her philanthropy.  Is he/she already contributing to organizations like yours? How much?  (2) Understand your organization’s needs and interests.  Do you need a gift for a certain project in which the donor has expressed interest?  How much does the project cost? Or are you just asking for general support?  Once you’ve done the preparation and listened to the donors concerns, you might say, “I would like you to invite you to join us with a gift of $______.” Then be silent and wait for the prospect to speak.

Do you have a question for Ann? Send it to This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Sources for Success

For more tips about making "the ask" read Jerold Panas' book, Asking: A 59-Minute Guide to Everything Board Members, Volunteers, and Staff Must Know to Secure the Gift.
A.C. Fitzgerald & Associates