As part of the financial rescue plan that President Bush signed into law last week, Congress extended the program that allows seniors to make charitable contributions from their individual retirement accounts (IRAs).

Through 2009, individuals who are 70 ½ or older can make tax-free charitable donations up to $100,000 from their IRAs. The program includes donations made this year.

This program was originally established for a two-year period under the Pension Protection Act of 2006. According to the Council on Foundations, it produced more than $130 million in charitable gifts in 2006 and 2007. 

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 you 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.
• Inform everyone in your organization who has contact with donors.