Making Charitable Giving Easier with Qualified Charitable Distributions

Key Takeaway: If you are age 70½ or older, Qualified Charitable Distributions (QCDs) can help you give more effectively and reduce taxable income. Learn how to simplify QCDs, avoid common administrative issues, and make charitable giving more tax-efficient and stress-free.

A Tax-Smart Way to Give — and How to Make the Process Smoother

For individuals age 70½ and older, Qualified Charitable Distributions (QCDs) offer one of the most tax-efficient ways to support nonprofits. For 2025, a QCD allows you to transfer up to $108,000 annually (adjusted for inflation) directly from your IRA to a qualified charity. These distributions satisfy your Required Minimum Distribution (RMD) and are excluded from taxable income, helping reduce your overall tax burden while maximizing charitable impact.

Despite these advantages, many donors find QCDs far more complicated to administer than expected. Below, we outline the most common pain points and what needs to change to make charitable giving as seamless as it should be.

Why the QCD Process Feels Harder Than It Should

1. Charities Changing Address

Most brokerage firms still issue QCDs as paper checks. When a nonprofit relocates or updates its address, checks can be misdelivered or returned. This forces donors to:

• Resubmit updated mailing instructions to their custodian
• Track down whether the prior check was canceled
• Resend the gift, causing unnecessary delays

This manual process increases the risk of error at exactly the time donors want a reliable, streamlined experience.

2. Brokerage Firm Limitations

Many custodians unintentionally add friction:

• Manual address changes are required each time a charity relocates
• Firms typically do not allow notes or designations (e.g., “for the scholarship fund,” or “in memory of…”)

Without these identifiers, charities may have difficulty allocating gifts correctly, especially when they receive multiple QCD checks in large batches.

3. Charities Struggling to Confirm Receipt

Even when checks arrive, nonprofits face challenges:

• Batch check processing leads to delayed data entry
• Checks often include minimal identifying information
• Donors call to confirm receipt, yet nonprofits may be unable to verify which donor’s IRA distribution was processed

This creates stress for donors and a significant administrative burden for charities.

The result? A charitable giving strategy that should feel rewarding instead becomes confusing and inefficient.

What Would Make QCDs Work More Smoothly?

Improving the QCD experience is not complicated. It simply requires better communication and more modern systems.

On the nonprofit side, even small operational choices can make a meaningful difference. Maintaining a stable or well-communicated mailing address, routing checks through a dedicated lockbox, or acknowledging QCDs quickly with donor-specific confirmation helps reduce confusion and anxiety. These practices reassure donors that their gifts were applied as intended.

Custodians also have opportunities to streamline their processes. A centralized database of verified charitable addresses would eliminate the need for constant updates. Allowing donors to include designations or identifiers would help charities match checks more reliably. And transitioning from paper checks to secure electronic transfers would eliminate some of the most common issues altogether.

None of these changes require new legislation, just a coordinated effort to modernize a process that has not kept pace with how retirees give today.

Why QCDs Still Matter

Despite these operational hurdles, QCDs remain one of the most effective charitable giving strategies for retirees — especially for those who:

• Do not need their full RMD
• Want to reduce taxable income
• Support multiple nonprofits each year
• Are seeking a straightforward, tax-smart giving approach

With thoughtful improvements, the QCD process can once again become the seamless and fulfilling charitable experience donors deserve.

Next Steps for Donors

To make the most of your QCD strategy:

• Review your charitable giving plan annually
• Confirm charity addresses before initiating gifts
• Coordinate early to avoid year-end delays
• Work with a Wealth Advisor who can navigate the details on your behalf

Mission Wealth regularly supports clients in structuring and executing QCD strategies that align with their philanthropic goals and income needs. If you have questions or want help simplifying your charitable giving, we welcome a conversation.

About the Author

Robert J. Pyle, MBA, CFP®, CFA, AEP®, CEPA® is a Partner and Senior Wealth Advisor at Mission Wealth, serving individuals in Boulder, Colorado, and the surrounding area. He specializes in providing personalized, comprehensive wealth management services to self-employed professionals, business executives, and small business owners throughout the country.