Tax-Smart Giving

Did you know there are several ways to donate to your favorite charities, while receiving tax benefits?

Below, you will find information about:

• Qualified Charitable Giving (QCD)
• Donor Advised Funds (DAF)

Qualified Charitable Giving

Use your existing IRA distribution to guide people to Christ!

If you are 70½ years old or older, you can take advantage of a simple way to receive tax benefits while helping Pilgrim Center of Hope.

By making a qualified charitable distribution, you can give up to $100,000 from your IRA directly to Pilgrim Center of Hope or other qualified charity without having to pay income taxes on your gift.

What is a Qualified Charitable Distribution (QCD)?

As defined by the IRS, “Generally, a qualified charitable distribution is an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70½ or over that is paid directly from the IRA to a qualified charity.”

QCD transfers can made only directly by the trustee of your IRA to an organization eligible to receive tax deductible contributions. Personally withdrawing the funds and then donating them to the nonprofit will not result in special tax benefits to the donor. QCDs can satisfy all or part of the amount of your required minimum distribution (RMD) from an IRA, and 100% of your gift will benefit the charitable organization you support.

What is a Required Minimum Distribution (RMD)?

If you are 70½ years old or older, the IRS requires you to start making withdrawals from most types of tax-advantaged retirement accounts. Individuals who have IRA’s are obligated to take a required minimum distribution (RMD) each year; the RMD is the minimum amount that he or she must withdraw from their account each year.

You must also take RMDs from retirement accounts you inherit. For most people, the deadline for taking an RMD is December 31. If you miss the deadline or take less than you’re supposed to, you could be subject to a tax penalty.

How does making a Qualified Charitable Gift help you?

Any amount processed as a QCD counts towards your RMD requirement and reduces the taxable amount of your IRA distribution, which lowers both your adjusted gross income and taxable income, resulting in a lower overall tax liability. And, if you direct your QCD to Pilgrim Center of Hope, it helps you respond to God’s call of guiding people to Christ!

How does making a Qualified Charitable Gift help Pilgrim Center of Hope?

Because we can put your gift to use right away, it will help PCH’s current evangelization efforts as we share the message of hope and peace and create encounters with Christ. Since 1993, this vital ministry has been reaching hundreds on a weekly basis. You will get to see your generosity in action!

If you are ready to direct a portion of your RMD as a charitable donation to Pilgrim Center of Hope, simply inform your financial advisor or IRA administrator. PCH’s tax ID is 74-2670987.

Distributions can be mailed to:

Pilgrim Center of Hope
7680 Joe Newton
San Antonio, TX 78251

Need more information before making a decision? Contact your IRA administrator or tax preparer or call us here at Pilgrim Center of Hope at 210-521-3377. The form below may also be used to reach us.

NOTE: This information is not intended as legal or tax advice. Please consult an attorney or tax advisor for more information about these options and for specific recommendations.

Contact Us about QCD Giving

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Donor Advised Funds

A simple, flexible way to support the good work you care about...

A donor-advised fund is like a charitable investment account, for the sole purpose of supporting charitable organizations cared about by the individual.

Cash, securities, or other assets given to a donor-advised fund at a public charity, like Fidelity Charitable, Schwab or some other institution, enables the individual to take an immediate tax deduction. Then, those funds can be invested for tax-free growth, and the individual can recommend grants to virtually any IRS-qualified public charity.

The DAF is set up at a donor-advised investment firm; it is set up by the individual, not the nonprofit organization.  The donor retains the right to advise on which charities should receive distributions.

DAFs are a tax-advantaged donation vehicle, especially useful when significant capital gains or appreciated assets (e.g., stock, mutual funds, and Exchange-Traded Funds/ETFs) are held.

Donors can see significant tax savings when they give to charities through the DAF, instead of donating directly. This is because capital gains taxes can be avoided, in addition to the deduction made for the donation itself. A capital gain is the current, appreciated value of an asset (e.g., stock) minus the original purchase price, which is called the cost basis.

For example, if a stock is currently worth $125 per share, and was purchased five years ago for $25, the cost basis is $25 and the capital gain would be $100. Donating the appreciated stock or cash proceeds to the DAF results in a donor tax deduction for the $125 donation value AND the donor will not have to pay taxes on the $100 capital gain, as they would if they sold the stock on their own, and donated the sale proceeds directly to the charity.

In addition, assets contributed to a DAF are not included in the donor’s estate, so they don’t count toward the total estate value. Thus, investing in DAFs can reduce the size of a taxable estate, increasing the money available to heirs.

To use a DAF for a donation to PCH:

1. Set up a DAF account with a financial institution
2. Make an initial, irrevocable gift of cash, stock, mutual fund, or ETF to fund the DAF (a minimum amount may be required to open the account).
3. The assets in the DAF grow tax-free. Additional funds can be added whenever you desire.
4. As long as there are assets in the account, you can make recommendations to the financial institution to give the assets, or cash, to one or more qualified nonprofit charities. Donations can be made anonymously, or not, as you wish.

Currently, Pilgrim Center of Hope is registered with GuideStar, a nonprofit registry.

If you choose a fund that does not have Pilgrim Center of Hope listed, please call us for our Tax ID number and banking information (210-521-3377, Deacon Tom Fox or Ann Gonsalves). Some brokerages give donors the option to sign and submit a transfer request electronically, while others require donors to mail in their transfer requests.

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Donor-advised funds are the fastest-growing charitable giving vehicle in the United States because they are one of the easiest and most tax-advantageous ways to give to charity.

For more information, feel free to contact

Ann Gonsalves, Development Coordinator
Office 210-521-3377

Download DAF Pamphlet