Acknowledging Qualified Charitable Distributions: Best Practices for Nonprofits
- Lydia Duffy
- 7 hours ago
- 2 min read
Qualified Charitable Distributions (QCDs) from IRAs continue to be one of the most powerful tools for donors age 70½ and older to support nonprofits. For planned giving professionals, acknowledging these gifts requires care—both to meet IRS requirements and to strengthen donor relationships.
What’s required?
Unlike standard charitable contributions, QCDs are paid directly from an IRA custodian to your organization. Donors do not receive a charitable deduction; instead, the gift satisfies required minimum distributions (RMDs) and reduces taxable income. Because of this:
No gift receipt with a value statement: Do not include language like “no goods or services were provided in exchange,” which is required for deductible contributions.
Keep it simple: An acknowledgment letter should confirm the amount received, the date, and that the organization qualifies as a 501(c)(3).
What’s recommended?
Beyond the basics, acknowledgment is an opportunity to reinforce the impact of the donor’s generosity. Many organizations include:
A personalized note highlighting the specific program or mission area the gift supports.
A reminder that QCDs can continue to be made annually.
A gentle invitation to discuss legacy giving opportunities, since donors making QCDs are often prime candidates for bequests.
Sample acknowledgment language:
“We gratefully acknowledge receipt of your Qualified Charitable Distribution of $X from your IRA. Your generosity helps [insert mission impact]. We understand this gift was made directly from your retirement account and therefore is not eligible for a charitable tax deduction. Please consult your tax advisor for details.”
The takeaway:
For planned giving professionals, a well-crafted QCD acknowledgment is both a compliance safeguard and a donor stewardship moment. By pairing accurate language with gratitude and vision, you ensure your organization meets IRS standards while deepening a donor’s long-term connection to your mission.