United States citizens living overseas (U.S. expats) can donate assets to establish charitable gift annuities with U.S. charities or charitable remainder trusts. But what are the specifics? Can U.S. expats fund charitable gift annuities or charitable remainder trusts? Can they donate foreign assets? Can they receive a charitable deduction? This Knowledge Base article will help you understand some of the nuances.

A qualified charitable distribution (QCD) counts toward the donor’s required minimum distribution (RMD), and that’s a great way to avoid some of the income tax on the RMD. However, some donors miss the fact that RMDs apply to all qualified retirement plans. In addition, donors may not fully understand that withdrawals from any qualified plan are taxable income unless the withdrawal is a QCD or a tax-free rollover to a different qualified plan.

So, while it’s accurate to say “your QCD will reduce the tax on your RMD,” that’s true only for the IRA account from which the QCD is made. And that’s the trap that snared your hapless donor: there is an RMD on their 401(k) which they will have to take this year. But they cannot make a QCD from a 401(k) to offset that RMD. Even worse, their retirement plan custodian cannot make a tax-free rollover to an IRA until after this year’s RMD has been withdrawn from the 401(k). Alas, it’s too late for this year but, fortunately, it’s easy to avoid this trap next year … if they act now.

This checklist may be a helpful guide to moving their money from a 401(k), 403(b), or other non-IRA account to prepare for future QCD contributions.

You may also wish to read the associated featured article: The QCD/RMD Trap Door: Act Now Before It’s Too Late!

This visual is designed to show donors why waiting until the year they have an RMD to move their 401(k) results in an unnecessary tax bill.

You may also wish to read the associated featured article: The QCD/RMD Trap Door: Act Now Before It’s Too Late!

The One Big Beautiful Bill Act (OBBBA) reshapes many aspects of tax planning. How these changes will affect donor behavior remains to be seen. For fundraisers, understanding the key changes – when they start, when they end, and how they’ll affect your donors – is critical to informing fundraising strategies and messages.

Most of the provisions of the OBBBA with significant potential impact on charitable giving take effect beginning in 2026 and, importantly, many of the charitable provisions are permanent and do not sunset. These changes provide a new, but complex, basis for charitable gift planning.

Here is a breakdown of several key provisions and their potential implications for donors . . .

On July 4th, President Trump signed into law HR 1, the One Big Beautiful Bill Act (OBBB). While technically a tax bill, the OBBB implements significant elements of the President’s second-term agenda including making permanent most of his 2017 tax cuts, which were set to expire at the end of 2025. Although the financial and tax impact on donors will vary, there is little in the OBBB that directly affects charitable gift planning, and the bill does not include many legislative priorities championed by the charitable sector.

Here is a summary of a few key individual taxpayer provisions of the OBBB along with some observations about the impact they could have on your work with donors.

Breaking News:

Late Monday, June 16, 2025, the Senate Finance Committee released its proposed revisions to the One Big Beautiful Bill Act. Among the proposed changes are:

• Increase and make permanent the non-itemizer charitable deduction to $1,000 for individuals and $2,000 for joint filers.
• Add a 0.5% floor on the charitable deduction for individuals who itemize (designed to offset the cost of the non-itemizer charitable deduction).
• Permanently extend the increased 60% AGI cap on the charitable deduction for cash contributions.
• Remove the increased net investment income tax on private foundations.
• Reduce the excise tax on investment income of private colleges and universities to:
  • $500,000 - $750,000 per student – 1.4% (same as House)
  • $750,000 - $2 million per student – 4%
  • More than $2 million per student – 8%
    (Note that “student” includes US citizens only)

Bear in mind, the Senate still must vote on the proposed legislation, and then the Senate and House versions will need to be reconciled. The majority are still pushing to pass the final bill before the July 4th holiday. In other words: “Stay tuned!”

Just after sunrise on May 22, 2025, the House of Representatives passed HR 1, “The One Big Beautiful Bill Act” by a vote of 215 to 214. Now, the Senate is considering the 1,038-page bill and proposing changes which will go back to the House for further consideration. Under the regular order, this back-and-forth process will continue until both chambers reach agreement on a final bill which then goes to the President for signature. The Administration’s announced ambition is to sign the bill into law by Independence Day.

We’re still a long way from knowing exactly what might be signed into law. Nevertheless, here is a summary of some of the provisions – as passed by the House – that could affect charitable giving.

With the … let’s just call it “excitement”  … of the 2024 election now in the rearview mirror, it’s time to consider what comes next. Political swings are often accompanied by uncertainty, sometimes even chaos. Charitable giving is voluntary behavior, and in the face of uncertainty and chaos the rational choice is to postpone voluntary decisions like whether to make a charitable gift. The savvy planned giving officer will pivot to reinforce the reasons for giving. As tempting as it is to fret over politics, tax policy, the economy, and the stock market, we really have no control over these factors. Instead, this is an opportunity to focus on the mission, explain the community's needs have not changed, and help our donors understand the difference they can make with their next charitable contribution.

Still, it is worthwhile to review the impact of past changes in the balance of political power on overall charitable giving. 

Just before the holiday season began in the fall of 2023, the Treasury Department published and sought comments on proposed regulations governing donor advised funds (DAFs). Although long anticipated, the proposed regulations caught many of us off guard. Was this the opening salvo, a continuing assault on DAFs, or the final barrage? Is there more here than meets the eye or less? And what’s coming next? 

For decades, donor advised funds existed in legal limbo. As funds of a public charity (the community foundation), they have operated under a web of legal concepts and regulations governing community trusts and nonprofit fund accounting. Finally, the Pension Protection Act of 2006 provided legislative direction and then, 17 years later in the fall of 2023, these proposed regulations were issued.

For the most part, the proposed regulations are focused on providing definitions, clarifying the roles and responsibilities of the parties, and clarifying the distinction between donor advised funds and private foundations. The regulatory approach, the big stick if you will, is to define certain donor advised fund distributions as taxable and apply an excise tax on them.

Contributions of appreciated assets offer tax savvy opportunities for gift planning. But what if the donor is not eager to part with the entire asset? That’s no problem if the asset is securities; our donor simply transfers as many shares as she chooses and keeps the rest for herself. However, other assets aren’t so easily divided – things like real estate or bank, investment, or retirement accounts. A contribution of a partial interest can allow donors to give a portion of the property and retain the rest for themselves, their family, or others.

Navigating a contribution of a partial interest can be a bit like the challenges Odysseus faced on his journey home. It wasn’t all smooth sailing. He had to navigate rocky shoals, whirlpools, and angry gods, but eventually, he made it home safely.