The Council on Foundations applauds Senator Chuck Schumer (D-NY) for introducing The Public Good IRA Rollover Act of 2015 (S.1159). This measure would make permanent and expand the IRA charitable rollover, a valuable incentive for Americans to contribute to charitable organizations across the country their mandatory distributions from IRA accounts. The Council is also grateful for Senator Susan Collins’ (R-ME) co-sponsorship and support.
The Public Good IRA Rollover Act of 2015 would eliminate the tremendous uncertainty caused by frequent lapses and subsequent extensions of the current IRA rollover provision. This uncertainty has made it especially challenging for donors to plan IRA distributions and charitable giving in advance. The bill would also enhance the value of the rollover by eliminating the $100,000 cap, allowing donors to make rollovers beginning at age 59 ½, and permitting rollovers to donor-advised funds, supporting organizations, and private foundations. Schumer and Collins released the following statement, “Making this provision permanent is good for charities and good for senior citizens who contribute to them from their IRA’s. It would eliminate uncertainty for both IRA holders 70 ½ and older who give to charity from their IRAs and to the charities that receive these contributions. These IRA holders deserve the certainty that the minimal disbursements they need to make out of their IRA’s every year can be given tax free to the charities of their choosing.”
Originally created by the Pension Protection Act of 2006 as a way to encourage older Americans to make gifts to charities, the IRA charitable rollover provision allows individuals age 70½ and up to donate up to $100,000 to a qualifying public charity directly from an IRA without incurring tax on the withdrawal. This benefit is available to all taxpayers, regardless of whether they itemize their deductions.
Without the rollover provision, a mandatory distribution from an IRA would trigger a tax burden, even if a taxpayer donates the money to charity and receives no individual benefit. The rollover removes this negative tax consequence—encouraging Americans to invest in charitable causes and organizations that they care about.
Unfortunately, the IRA charitable rollover expired at the end of 2014 and has not been renewed by Congress.
“The Council urges the Senate to support measures that extend the IRA charitable rollover permanently,” said Council on Foundations President and CEO Vikki Spruill. “The America Gives More Act of 2015, which decisively passed the House of Representatives earlier this year, included this measure. Our members appreciate that S.1159 expands that provision as well, which would allow more Americans to transfer their dollars to charitable and philanthropic organizations for investment in the common good.”
An active philanthropic network, the Council on Foundations, founded in 1949, is a nonprofit leadership association of grantmaking foundations and corporations. It provides the opportunity, leadership, and tools needed by philanthropic organizations to expand, enhance and sustain their ability to advance the common good. The Council empowers professionals in philanthropy to meet today's toughest challenges and advances a culture of charitable giving in the U.S. and globally.