High Fives for IRAs: 5 Things to Know About Retirement Assets and Charitable Giving

Every day, we get to talk with donors and fund holders about the causes they love and the best ways to support them, whether through a donor-advised fund, an unrestricted gift to the Foundation, a legacy gift to a favorite organization, or something in between.

One topic comes up again and again: how to use an IRA or other retirement account to support charitable goals. That’s understandable. For many West Texas families who have spent decades in the workforce, retirement accounts have grown into one of the largest assets they own, and the rules for giving from them can be hard to keep straight.

We’re here to help. Our team is glad to work alongside your tax and estate planning advisors to build a giving plan that fits your goals, including ways to use your retirement accounts. As year-end approaches, please consider sharing these five points (plus a bonus!) with your advisors.

1. Age 70½ is still an important giving milestone.

If you’ve reached age 70½, you may be eligible to make a qualified charitable distribution (QCD) directly from your IRA to an eligible charity. You don’t have to wait for required minimum distributions (RMDs), which generally begin at age 73 or 75 depending on your birth year. You can start using QCDs for your giving as soon as you’re eligible.

2. The 2026 QCD limit is $111,000 per person.

The QCD limit is indexed for inflation and is $111,000 in 2026. If you’re married and you and your spouse each meet the requirements and have your own IRAs, each of you has a separate limit. A QCD works differently from a typical charitable gift. Instead of being claimed as a deduction, the distribution is generally excluded from your taxable income. And if you’re already taking RMDs, a qualifying QCD can count toward your RMD. That can make a QCD especially useful if you don’t itemize deductions, or if you’d simply like to put part of your IRA to work for the organizations and causes you care about.

3. Make sure the money travels the right path.

The mechanics matter. To count as a QCD, the distribution must go directly from your IRA to an eligible charity. Generally, if you withdraw the money, deposit it in your bank account, and then write a check, the gift won’t receive QCD treatment.

Under current law, donor-advised funds generally can’t receive QCDs. If you have a donor-advised fund with us, we can still help. Permian Basin Area Foundation offers other types of funds that may be eligible, including designated funds that support specific nonprofits, field-of-interest funds focused on a specific cause or community, and unrestricted funds that help us respond to changing needs across our communities. Please reach out before you start the transfer, and we’ll work with you and your advisors to find the right fit.

4. Keep an eye on Washington.

If you enjoy following legislation, two bipartisan proposals in Congress are worth watching. The Charity Parity Act (H.R. 8783) (Senate version, S.4511) would allow eligible donors to make QCDs directly from certain employer-sponsored retirement plans, such as 401(k)s and 403(b)s, in addition to IRAs. Another bipartisan proposal, the IRA Charitable Rollover Facilitation and Enhancement Act of 2026 (S.3975), would allow QCDs to go to donor-advised funds.

Neither proposal is law, and proposed legislation may or may not pass, so don’t count on these options just yet. Both are worth watching, especially if you have significant retirement assets or use a donor-advised fund as an important part of your giving.

5. Remember your IRA when planning your legacy.

QCDs let you give from retirement assets during your lifetime. There’s another opportunity that’s easy to overlook: you can name a charity, including your fund at Permian Basin Area Foundation or the Foundation itself, as a beneficiary of your IRA or other retirement account.

Retirement accounts can be especially good assets to leave to charity. Traditional retirement assets left to individual heirs may come with income tax, while a tax-exempt charity generally pays no income tax when it receives them. The process can also be simple. You may be able to leave all or part of an account to charity by updating your beneficiary designation, without changing your will or revocable trust. Be sure to coordinate any change with your overall estate plan and review it with your legal, tax, and financial advisors.

Legacy gifts have shaped our communities for generations.

 In 1993, the generosity of Grace Jones, together with local leadership in Stanton, established the Martin County Community Fund, an endowment that continues to support causes in Stanton. A beneficiary designation is one simple way to create that kind of lasting impact.

Bonus: You don’t have to figure this out on your own.

Retirement assets sit where tax, financial, estate, and charitable planning meet. That’s one reason we love working alongside your professional advisors. Whether you’re considering a QCD before year-end, thinking about naming a charity in your beneficiary designations, or simply wondering whether your retirement assets could do more for the causes you care about, please reach out. We’re here to help you explore the possibilities.

Permian Basin Area Foundation itself began with one generous decision. In 1983, a visionary gift to United Way of Midland led to the Midland Community Trust, which became Permian Basin Area Foundation in 1989. Since then, donors across West Texas have trusted us to turn their generosity into lasting good, with more than $200 million in grants and scholarships so far. 

Thank you for the opportunity to work together!

Disclaimer

This content is for general informational purposes only. Permian Basin Area Foundation does not provide legal, tax, or financial advice. Please consult your own advisors before making any charitable giving or financial decisions.