Charitable Giving Through Your IRA

During Boxer Excellence Week back in December, Pacific Trustee Julie Berglund Baker wanted to make a gift to support Pacific. So she named Pacific as the primary beneficiary of her IRA and pledged the amount to the College of Business Excellence Fund.

“I gave my IRA to Pacific University’s Lead On campaign to boost the endowment and help the business school move to a well-regarded program meeting the needs of students and employers in the region,” Julie said. “The gift of my IRA was an easy, painless way to make a large contribution when it became clear we wouldn’t need it for our retirement.”

Pacific alumnus Jim Fitzgerald ’68 also recently made a gift to Pacific from his IRA and used it to establish an endowment, which will provide perpetual funding to the university.

“For those of you like me who have reached age 70½, a direct contribution by your IRA to Pacific has a number of important advantages,” Jim said. “It counts toward your required yearly IRA minimum distribution, the gift is excluded from your taxable income, and it supports Pacific in providing a quality educational experience to its students.”

Are you looking for a way to make a charitable contribution to Pacific University, but unsure of how substantial a gift you can make at this time? Thinking of leaving a gift to Pacific in your estate, but don’t want to leave loved ones with large gift, income or estate taxes?

Consider including a charitable gift as part of your plans for your Individual Retirement Account (IRA). IRAs provide income tax savings at the time contributions are made to your plan, and the assets build tax-free over time for your future enjoyment. These assets are not subject to income tax until withdrawn from your plan by you or your heirs.

Designating Pacific as a beneficiary of any balances remaining in your IRA at the end of your lifetime is one possible way of giving through your IRA. By directing such assets as a charitable gift to Pacific from your estate, you can spare your family the estate and income taxes on those assets. This can actually result in more assets being received by loved ones than if your retirement assets were left to your family and charitable gifts were made from other funds.
 
If you are over the age of 59½ and can make withdrawals from your IRA, you may find that your IRA is a convenient pocket from which to make a charitable gift to Pacific today. Although any funds withdrawn during your life from an IRA are normally subject to income tax, if the funds are donated for charitable use, you can take an offsetting charitable income tax deduction that can render the transaction a wash for tax purposes. This will ensure that those funds will not be subject to other gift, income or estate taxes.

Those aged 70½ can transfer up to $100,000 each year from their IRA free from federal income taxation, which can count toward the required minimum distribution. In years where your minimum distribution requirement exceeds what you currently need for living expenses, making a gift to Pacific with the remaining amount might be a strong option.

Making a charitable gift to Pacific from your IRA is easy. It takes just minutes to set up Pacific as a beneficiary — Julie did it on her phone!

For more information on how to make a gift to Pacific from your IRA or how to designate Pacific as the primary beneficiary of your IRA, or if you have already designated Pacific as your beneficiary and wish to let us know of your plans, contact Jan Stricklin, Associate Vice President for University Advancement at Pacific University. If you are considering making a gift to Pacific from your IRA, consult with your tax or financial advisor to make sure you meet age minimums, restrictions and requirements.