Expanded opportunities for joyful generosity

Pastors and other congregational leaders in the United States are encouraged to alert people aged 70 ½ and older of a new opportunity for joyful generosity. It’s now possible for older persons in U.S. congregations to give directly to charities from their Individual Retirement Accounts (IRAs)—without the hassle of paying income tax on it first—thanks to legislation signed into law in August 2006.

Under the Pension Protection Act of 2006, individuals may make tax-free contributions to charity directly from their traditional and Roth IRAs. It is anticipated that this long-awaited legislation will result in the release of millions of dollars for immediate use by U.S. charities, and that is good news for Christian ministries.

It is also good news for certain donors, including:

• Individuals who don’t or can’t itemize their taxes in order to claim charitable gift deductions.
• Donors who have reached their charitable deduction limit.
• Donors living in states that don’t allow charitable deductions.
• Individuals may satisfy their required minimum distributions by gifting directly from the IRA to charity.

The ability to make direct contributions to charities (including churches, BIC World Missions, and Cooperative Ministries) from an IRA is available for the 2006 and 2007 tax years and applies to outright lifetime transfers only. IRA owners must be age 70 ½ or older in order to take advantage of the new law, and tax-free donations are capped at $100,000 a year per donor.

For more information about the legislation and how it may effect your own giving or the generosity of others in your congregation, contact Jim Smiley, director of planned giving, at (717) 697-2634.

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