IRAs

Use your IRA to fund a charitable gift annuity. This means that with a simple phone call, you can:

1. Lower your taxable income by up to $50,000
2. Receive guaranteed payments for the remainder of your life, and
3. Help build a brighter future for a child at Mercy Home

For your convenience, we’ve provided sample language for a “letter of instruction” to your plan administrator below.

An Individual Retirement Account (IRA) is a tax-advantaged retirement savings account. Giving from your IRA is one of the easiest ways to lower your tax bill and make a difference in the lives of our kids. Here are three ways you can use your IRA to support Mercy Home, reduce taxes for yourself and your heirs, and even collect a guaranteed income for the rest of your days:

1. Make a Qualified Charitable Distribution from your IRA

You can choose to withdraw funds from your IRA at any time, but after you turn 73, the IRS requires you to draw down your account each year. This is called your Required Minimum Distribution (RMD), and it is taxed as ordinary income. That extra income from the RMD might even bump some people up into a higher tax bracket!

But by making a Qualified Charitable Distribution (QCD), which is a direct donation from your IRA to a charity, you can satisfy all or part of your RMD without increasing your tax bill, and supporting your favorite charities at the same time. For instance:

1. You can start making QCD gifts as early as age 70 ½ (a few years before your RMD kicks in)
2. You can contribute up to $108,000  
3. You can make QCD gifts to as many charities as you like. You’ll lower your adjusted gross income (and your tax bill), and your gift will support kids in need today!

Making a QCD gift is quick and easy. Simply contact your IRA administrator and ask to make a “Qualified Charitable Distribution” to Mercy Home from your IRA account. Please note that in order to receive charitable benefits, a QCD gift must come directly from your IRA to Mercy Home. Be sure to ask your administrator to add your name to the check so we can properly thank you for your generosity.

2. Use Your IRA to Fund a Charitable Gift Annuity

Recent tax legislation now allows you to use your IRA to directly fund a charitable gift annuity (CGA) for a qualified charity, like Mercy Home. Here’s how: 

1. You give a gift to Mercy Home directly from your IRA (same as the QCD method above)
2. We pay you back a percentage of this gift for the rest of your life, guaranteed
3. This tax-free IRA withdrawal will count toward your RMD (however, the annuity payments to you will still be taxed)
4. You’ve found a way to satisfy your RMD this year, receive guaranteed payments for life, lower your tax bill, and provide life-changing care to young people in need

3. Name Mercy Home as a Beneficiary of Your IRA

For most people, the simplest way to leave a legacy gift is by naming a charity like Mercy Home as a beneficiary of one or more of your retirement accounts (like an IRA, 401k, or 403b). Contrary to popular belief, most retirement plans are not governed by your will or trust. This means that even if you already have a will, you must also complete a Beneficiary Designation Form for each of your retirement assets (including an IRA), indicating who should receive the funds after you are gone. The good news is that doing so is easy: just fill out a simple form in a few minutes (no attorneys or fees for you to pay).

You can name individuals as your beneficiaries. However, because these plans are heavily taxed when left to heirs other than your spouse, retirement accounts are terrific assets to leave to your favorite charity. 501(c)3 nonprofit organizations like Mercy Home are tax-exempt, which means that your retirement assets will be used to help children in need (rather than pay for taxes). It just might be the easiest (and wisest) way to make an extraordinary gift to charity!

“The lady who prepares my taxes told me about [the tax savings I’d receive by] giving through my IRA. It just seemed the reasonable and simple thing to do. I’m taking my 10% off the top and saying this doesn’t belong to me, it belongs to God. It’s such a privilege to see the power and potential for these children once they are in Mercy Home’s care.”

– Midge

Further Reading

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Legal name and Tax ID

Legal Name:
Mission of Our Lady of Mercy, Inc.

Employer Identification Number (EIN):
36-2171726

More information for financial professionals.

Philanthropic information presented herein is intended for friends and supporters of Mercy Home for Boys & Girls. This material may be helpful in your tax and financial planning, and is based on current laws and recent court decisions. You should consult your own legal, tax, or financial planner to determine how these gift vehicles may apply to your own situation.