For many donors, giving is both a personal value and a financial decision. Qualified Charitable Distributions, or QCDs, offer a thoughtful way to align both.
North Texas Community Foundation works alongside fundholders and professional advisors to help turn these required actions into local impact through flexible, tax-efficient strategies and trusted community connections.
Understanding Required Minimum Distributions
Once you reach the age of 73 (moving to age 75 in 2033 according to the SECURE 2.0 Act), the IRS requires you to take annual withdrawals from most tax-deferred retirement accounts, including traditional IRAs. These withdrawals are known as Required Minimum Distributions. Check with your financial advisor on the timing of your initial distribution.
An RMD is included in your taxable income for the year. For many individuals, this can increase overall tax liability and, in some cases, affect Medicare premium calculations.
While RMDs are required, how you use those funds can be intentional.
What Is a Qualified Charitable Distribution?
A Qualified Charitable Distribution allows individuals age 70½ or older to transfer funds directly from an IRA to a qualified charitable organization.
Because the distribution goes directly to a nonprofit, the amount is generally excluded from taxable income. This distinction matters. It can reduce your adjusted gross income and help limit exposure to higher tax brackets or Medicare surcharges.
A QCD can also satisfy all or a portion of your Required Minimum Distribution for the year.
How QCDs Work With Your Giving Plan
QCDs are designed for direct charitable giving. While they cannot be contributed to a donor advised fund, they can still play a valuable role in your overall philanthropic strategy.
You might consider directing your QCD to North Texas Community Foundation grant cycles that align with your charitable interests and are supported by endowed funds and legacy gifts. These opportunities focus on priorities across North Texas and help ensure your giving connects to needs in our community.
North Texas Community Foundation’s Grant Cycles include:
> Support areas such as animal welfare, arts and culture, children and families, and land conservation
> Provide assistance through our Fleetwood Memorial Fund for first responders injured or killed in the line of duty across the state of Texas
> Invest in community development through initiatives like the BEACON Fund, which supports historically disinvested neighborhoods or Toolbox, which strengthens capacity-building for nonprofits
These grant cycles offer opportunities for you to make on impact on our region’s most pressing needs.
The Fund for Good: Responding to What Comes Next
Another way to direct your QCD is through The Fund for Good. This fund allows North Texas Community Foundation to respond to evolving needs and invest in solutions that strengthen our region over time.
The Fund for Good supports initiatives that improve economic opportunities, strengthen neighborhoods and bring together community partners to address complex challenges.
North Texas Community Foundation brings donors, nonprofits and civic leaders together to put charitable dollars to work where they matter most.
Why Timing Matters
QCDs are often associated with year-end giving, but planning early in the fall allows you to:
> Satisfy your Required Minimum Distribution sooner
> Avoid processing delays with retirement account custodians
> Plan your giving with greater clarity and confidence
If you are considering a Qualified Charitable Distribution this year, please reach out to your professional advisor.