The Giving Tool That Could Get Even Better

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By Chris Sawin, President & CEO, Outer Banks Community Foundation

If you’re 70½ or older, you may already know about Qualified Charitable Distributions—or QCDs—which allow you to give directly from your IRA to certain types of charitable funds. QCDs help meet your required minimum distributions while avoiding taxable income. For many of our donors, it’s a smart and meaningful way to support the causes they care about. But there’s one big limitation: under current law, you can’t make a QCD to a donor-advised fund (DAF).

That rule is over 20 years old, and it no longer fits today’s charitable giving landscape. Back then, donor-advised funds were relatively uncommon. Today, DAFs are a central part of how thousands of Americans—especially retirees—organize and plan their charitable giving. At the same time, fewer older adults are itemizing deductions due to the higher standard deduction, making tax-savvy giving tools like QCDs even more important.

That’s why we support the bipartisan push in Congress to update this outdated restriction and allow QCDs to be directed to donor-advised funds. The Council on Foundations and other national philanthropic leaders recently issued a joint communique urging lawmakers to pass this common-sense fix—and we agree. Unlocking QCDs for donor-advised funds would make it easier for donors to give more, more strategically, and more consistently. And it could mean a major boost for smaller, grassroots nonprofits that rely on donor-advised fund grants.

At the Outer Banks Community Foundation, we’ve seen firsthand how donor-advised funds help families stay engaged in giving over time—whether by supporting local nonprofits, funding scholarships, or responding to community crises. It’s time for the law to catch up.

We’ll keep you posted on this potential change and other updates that affect your charitable giving. If you have questions about QCDs, donor-advised funds, or any other giving strategies, don’t hesitate to reach out—we’re here to help. You can email me at chris@obcf.org or call the office at 252-423-3003.