 Back when I worked for The University of Southern Mississippi Foundation, I ran a few casually informative campaigns promoting IRA rollover gifts, but like many fundraisers, I didn’t think of them as crucial to meeting our goals. I’ll admit I didn’t realize the power of the IRA Rollover, otherwise known as Qualified Charitable Distributions. When I began working for Starr King School for the Ministry, one of the members of my Advancement Committee suggested that we put more emphasis on IRA Rollovers in our calendar year end campaign. As a small school with very small fundraising shop (me and one other employee doing gift processing), I honestly didn’t feel like we had the bandwidth to pursue this additional messaging. (Something I bet many of you can resonate with!) However, I used my previous templates from my work at the USM Foundation and we sent out letters and emails during that December. This was the first time this school had ever mentioned IRA Rollovers. Was it a coincidence that by February we had a long-time monthly donor call and offer to gift the school the entirety of her retirement account? Maybe, but I tend to think that’s unlikely. While we spread that gift out over a 6-year period for tax reasons, that gift surpassed over half a million dollars for the school! The next year, we greatly expanded how we promoted IRA Rollovers, utilizing video, email, letters, and social media to educate our donors. Each year more constituents began to give via rollover and I do not think we have seen the crest of this wave yet. As you can tell, IRA rollovers hold immense potential for both retirees and nonprofit organizations. Here's everything you need to know about them and why they're more significant than you might realize. The Growing Importance of IRAs According to Freewill, a company that helps nonprofits market planned giving opportunities, in 2021, a staggering $13 trillion was held in Individual Retirement Accounts (IRAs) in the United States. With 10,000 Baby Boomers turning 65 every day, the importance of understanding IRA rollovers is greater than ever. As these Boomers reach retirement age, they face critical financial decisions, one of which is the Required Minimum Distribution (RMD) that kicks in at age 72. If IRA owners fail to take their RMD, they can incur a hefty tax penalty. On the flip side, if they do take it, it's taxed as regular income. Why IRA Rollovers are ✨Amazing✨ IRA rollovers are not just beneficial for nonprofits; they offer significant advantages to donors as well. Here’s why they are truly amazing:
The Overlooked Goldmine for Nonprofits Despite the substantial sums involved, many nonprofits are not capitalizing on the potential of IRA rollovers. In 2021, a shocking 43% of nonprofits reported that they didn’t promote rollovers. This oversight is significant, especially considering that most IRA rollovers come in at the $1,000-$5,000 range (Freewill). Furthermore, 96% of nonprofits believe that donor awareness about IRA rollovers is insufficient. This lack of promotion and awareness translates to missed opportunities for substantial donations. The Power of Qualified Charitable Distributions (QCDs) For those over age 70, a QCD can be an ideal way to make their annual charitable gift. QCDs are typically much larger than post-tax gifts, offering a more substantial benefit to nonprofits. Additionally, organizations that market QCDs at least three times per year are 3.2 times more likely to receive ten or more QCD gifts. The Role of Marketing and Communication Effective communication is crucial in promoting IRA rollovers. After direct one-on-one conversations with gift officers, having information about rollovers on the nonprofit's website is the second most important promotional factor. Interestingly, 46% of QCD gifts come from previous donors, highlighting the importance of nurturing existing relationships through consistent and clear communication. Conclusion: A Call to Action for Nonprofits Nonprofits cannot afford to ignore the potential of IRA rollovers. By raising awareness and actively promoting QCDs, organizations can tap into a significant source of funding. Whether through direct conversations, informative website content, or regular marketing efforts, it’s time for nonprofits to educate their donors about the benefits of IRA rollovers. By doing so, they can unlock a steady stream of donations that support their mission and make a lasting impact. Remember, the more informed and engaged your donors are, the more likely they are to contribute through their IRAs, ensuring your nonprofit can thrive and continue its valuable work. Cheers!  Get Your Free Resource: "Calendar of IRA Rollover Promotions"
To help you get started, download our free resource, "Calendar of IRA Rollover Promotions." This calendar is designed to help your nonprofit strategically plan and execute effective IRA rollover promotions throughout the year. Download Now. If you are ready to get started right away… Visit the Real Deal Fundraising Etsy Shop where you can download 28 customizable templates based in the IRA Rollover Promotion Bundle – including web copy, video scripts, email templates, social media templates and an informative slide deck which can be used with donors or to train staff! 🌟 |
Jessica Cloud, CFREI've been called the Tasmanian Devil of fundraising and I'm here to talk shop with you. Archives
May 2025
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