Public Good IRA Rollover Act of 2007
In the good old days (2006 and 2007), one could make a gift directly from his IRA (if over the age of 70 ½) to a charity of his choice (except for a donor advised fund, private foundation or supporting organization) in any amount (provided it is less than $100,000 per year in the aggregate). Ahhh, those were the days.
Last week 300 trustees, staff and donors of grant making foundation in 35 states “took the Hill” to encourage our legislative representatives to support positions favorable to philanthropy (see www.foundationsonthehill.org for our position statements). One of our concerns is to have Congress reinstate the former IRA legislation with improvements - eliminate the $100,000 cap on annual giving, lower the eligible age limit to something more reasonable than 70 ½ and include donor advised funds, private foundations and supporting organizations as eligible grantees.
Let me give you a personal perspective of why these suggestions make sense. The government would love for me leave my IRA to my children so they can tax it as a part of my estate, after which they will tax it again when my children receive distributions. This would give Uncle Sam about 75% of my IRA, leaving little for my children.
I say, “No deal!” Uncle Sam will never receive a penny from my IRA! The beneficiary of my IRA is not my children, but a family advised fund at The Community Foundation, from which my children and prospective grandchildren can recommend grants to charities of their choosing.
I am not alone in this resolute stance. Every lawyer, accountant and financial planner worth his salt is advising his charitably inclined clients to do likewise.
So, if Uncle Sam is out of the picture, why wouldn’t he be better off if I give away my IRA to charity during my lifetime? This will get the money back into circulation sooner. Charities will be better off. Projects will be undertaken. People will be hired. Taxes of all kinds will be paid.
If you agree with this common sense position, here is what I want you to do. First, make a charity the beneficiary of your IRA. Second, call your Congressman and ask him to support the Public Good IRA Rollover Act of 2007 (Bill S.819 in the Senate and Bill H.R. 1419 in the House of Representatives).