Happy 20th Birthday, IRA QCD!

Twenty years ago today, on August 17, 2006, President George W. Bush signed into law the Pension Protection Act of 2006.  It’s a large bill, with hundreds of pages of text covering many topics—fourteen titles and 154 sections, by my count.  It contains many provisions—some well-known and some obscure—covering various issues related to retirement.  It is toward the end of the Act, in Title XII, where the sections most relevant for charitable organizations come into play.

Among the several then-new provisions of the PPA affecting charitable giving (notably including then-new rules for donor advised funds, changes to deductibility of gifts of fractional interests in tangible personal property, and various updates to the tax substantiation rules, including requiring qualified appraisals for certain non-cash gifts over $5,000), perhaps the most consequential for charities and donors over the last 20 years—and for the years to come—is found in Section 1201:  the introduction of the IRA Qualified Charitable Distribution (“QCD”), sometimes colloquially called the “IRA Charitable Rollover.”

As a quick reminder for any who may not be familiar, here are the basic guidelines for QCD gifts:

• The gift must be from an IRA, not from a 401(k) or other qualified retirement plan account (but see P.S. below).
• The check or distribution must come directly from the IRA administrator to the qualified public charity.
• The donor must be at least 70-1/2 years old at the time of the distribution.
• For donors age 73 or over, QCDs can count toward and satisfy annual required minimum distributions (RMDs).
• A donor can give any amount up to $111,000 ($222,000 per married couple) in 2026 without including the QCD in gross income.
• Because the QCD is excluded from gross income, there is no charitable income tax deduction for it.
• Donors may enjoy a tax benefit from a QCD whether they itemize or take the standard deduction.
• A QCD cannot be made to a Donor Advised Fund or to a private foundation (but see P.S. below).
• With the limited exception of the one-time opportunity to fund a life-income gift (Charitable Gift Annuity or Charitable Remainder Trust) with a QCD in an amount up to $55,000 this year, indexed for inflation, there can be no quid pro quo in exchange for a QCD.  This means nothing of substantial value that would reduce what would otherwise be a deductible amount.  As Conrad Teitell might say, “Not even a rubber chicken dinner.”

Giving through QCDs has grown enormously since enactment in August 2006.  The NCPG (now National Association of Charitable Gift Planners) reported in June 2007 testimony to Congress having received reports of 4,500 QCD gifts totaling approximately $80 million within that first year.  Anecdotally, my previous employers as well as my current nonprofit organization clients have seen dramatic upswings in QCD giving in recent years. Also, my work with individual donor clients bears out their increased familiarity with and use of this way to give as well, particularly since the QCD was made permanent through the PATH Act in 2015.  There is little broad national data on QCDs, but a few published reports similarly show accelerating adoption.  For example, in 2020, FreeWill reported from its surveys 67% growth in the number of QCD gifts from 2018-19 alone, and estimated 2.9 times average growth from 2017-2019.  MarketWatch reported last year that Fidelity saw a 579% growth in the number of QCDs from 2020-2024, describing it as the fastest-growing type of giving.  FreeWill further reported just a couple of months ago from its latest QCD report increases of 56% in 2024 and another 47% in 2025 in QCD giving on its platform.  While these are internal and survey reports from just a couple of companies and not scientific studies, those observations are examples indicating a clear trend of rapid growth.  And yet, I believe we’ve only scratched the surface of opportunity for gifts from retirement accounts, not only with QCDs from IRAs but also in charitable beneficiary designations on qualified retirement plan accounts generally.

In marking the 20^th anniversary of what has become a valuable tool for charitable fundraisers, donors, and advisors, I wanted to take this moment to give thanks to those who envisioned it and advocated to make it a reality.  In particular, as I understand it, the idea that became the QCD first was championed by the late, great Clint Schroeder and the still-great Conrad Teitell.  According to Ron Brown, Schroeder and Teitell began advocating for the “charitable rollover” at the American Bar Association as far back as 1982.  I always thought of Clint and Conrad, along with Charles Schultz, as the original “Rollover Rangers.”  (Indeed, I remember personally hearing Clint and Charles, and I think Conrad too, referring to the Rollover Rangers in conversation or sessions with them prior to the passage of the PPA.)  I’m sure someone will correct me and set the record straight if wrong, but I believe that early group also included Frank Minton, Emil Kallina, Craig Wruck, and Tanya Howe Johnson.  They didn’t do it alone, though.  I know many others, including Reynolds Cafferata and Joe Bull, were involved in advocacy toward getting the initial IRA QCD passed.  I’m sure there are others I don’t know who I’ve unintentionally omitted as among those leading the charge, and thank you to them as well.  I’ve been lucky enough to have learned things from each of these listed folks over the years, and to have had Clint as an early mentor (first met him as a fresh-faced 1L in law school—30 years ago this fall!—but really got to know him well starting in 2005 when I left the Dorsey firm to join Frank Robertson and Jane Townsend on the University of Minnesota Foundation Planned Giving team).  Thank you to all who worked to make the QCD a reality, whether named here or unnamed. 

Happy 20^th Birthday, IRA QCD!  😊

P.S.  Two bills currently under consideration before Congress would expand QCDs, if enacted:

• The Charity Parity Act (S. 2204 / H.R. 4495) would allow QCDs from employer-sponsored plan accounts, such as 401(k) accounts.
• The IRA Charitable Rollover Facilitation and Enhancement Act (S. 3975) would allow QCDs to donor advised funds (DAFs).

P.P.S.  It occurred to me that this summer also marks another less significant (but still meaningful to me) anniversary:  10 years of Generoworks!  I’m grateful to all who have given me a chance to help others through it, and will have to write more on that topic another time.  Lots to celebrate!