We’re getting pretty good at marketing rollover IRAs here at MarketSmart.
Here are some of the things we’ve learned as we’ve crafted a value proposition that generates massive amounts of money for good causes.
NOTE: If you haven’t cracked the code on seriously turning up the dial with your rollover IRA marketing, maybe it’s time you contacted us?
1. Giving away the money they saved helps them feel good when they make a gift to support a cause they believe in;
2. Many people over 70 1/2 years old find that they do not need their IRA funds to support themselves, so they might find themselves taking one, lump-sum required minimum distribution (RMD) each year (usually in the 4th quarter). Instead, they could make a qualified charitable distribution (QCD) to avoid paying tax on the RMD (since it will increase their adjusted gross income). Then the QCD transferred directly to charity will likely also reduce their taxable income;
3. They also might like the fact that a QCD will probably simplify their tax returns;
4. Getting their ‘custodian’ (the institution responsible for safeguarding their financial assets) to transfer the funds is relatively easy;
5. Plus giving a QCD might make them happier because their yearly gift from their IRA is likely to be larger than their usual end-of-year donation by check or credit card. And, they can even give up to $100,000 annually per person so they can feel good knowing they are doing more to support a cause in which they believe.
6. And, leaving the IRA to a charity as a beneficiary in their estate plan is pretty darn easy and could reduce their taxable estate (if they need it to be below $11.2 million) while doing so might entitle the supporter to benefits you afford only to legacy society members.
Why fundraisers like Rollover IRAs
A. Qualified charitable distributions (QCDs)
1. QCD’s might usually be much larger than a supporter’s regular yearly (annual fund) donations;
2. QCD’s could be ‘gateway’ gifts leading to larger major gifts during the supporters’ lifetime or a bequest (assuming the fundraisers build relationships with the QCD donors);
B. Legacy gifts by beneficiary designation
3. The charity could get to keep what remains of the IRA when the donor dies if the charity is the sole beneficiary (although keeping a portion and splitting it with heirs is usually not so bad either);
4. IRAs tend to hold hundreds of thousands of dollars and continue to grow. Therefore IRA gifts to charity by beneficiary designation tend to be quite large.
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