Message from the Development Office

RebeccaUsing your Individual Retirement Account (IRA) to Give

Did you know you can use your IRA to give to SDSU? Using your IRA to fund gifts to your favorite charities has become more valuable than ever before. If you are over the age of 70.5 and have to take the Required Minimum Distributions then you are eligible to use a tax strategy called a Qualified Charitable Distributions. A Qualified Charitable Distribution allows you to send money directly from your IRA to your qualified designated charities. When you do this, your Required Minimum Distribution is satisfied and the distribution is not taxable to you. You can also leave any remaining balance in your IRA to SDSU upon your death.

If you are over the age of 70.5, then a Qualified Charitable Distribution will still allow you to give on a pre-tax basis. Here is an example. Mrs. A. needs to take an Required Minimum Distribution of $10,000 this year. She is not eligible to claim deductions. She has $1,000 sent to SDSU and $1,000 to her church. The other $8,000 is deposited to her checking account. Rather than pay taxes on $10,000 she is only taxed on $8,000. The ability to deduct is a non-issue. Notice that she was able to divide her gift between two areas and that she did not have to give her entire distribution. There is a lot of flexibility in this strategy.

For this to work you must contact your IRA custodian and have them send the contribution directly to your charity. There is no special reporting to the IRS for the Qualified Charitable Distribution, but it is vital that you tell your tax preparer what you have done. If you do not let him or her know, then you could lose the tax benefit. Sample letters for this can be found at www.plannedgiving.sdsu.edu. The site has lots of other information about giving options as well.

By using this strategy, your gift will be put to use today, allowing you to see the difference your donation is making. Assuming you meet the minimum requirements, you can use this gift to set up a scholarship, or support a particular program or research area you are interested in. You can also contribute to an existing scholarship or fund that you or someone else has already set up. The development team would love to talk about the options available to ensure that your gift supports exactly what you want it to. Currently we require a $25,000 gift for a named scholarship or $50,000 to create an endowment to support a scholarship or other area. However, these amounts can be pledged over five years and can be a combination of several different types of gifts. If you are not able to give at that level, there are still lots of ways to support an area of interest, so please reach out and ask about what is possible.

There are, of course, many other ways to give to SDSU, and the development team is always ready to help you find the best option of you. We also advise everyone to consult with their personal financial advisors to help determine possible tax advantages and other considerations when decided how you would like to support SDSU and its students. Please reach out to any of us for more information about using your IRA to give or to explore other options.