Your Questions Answered: Can I Donate My QCD to a DAF?

William is a client that utilizes a Qualified Charitable Distribution each year to meet the RMD obligation from his IRA. As an aside, a QCD is a distribution from your IRA made directly to a charity and is available after age 70 ½. This is usually a tax-smart move for taxpayers that support charities and are taking the standard deduction.

Toward the end of 2023, William and I were planning for his QCD for that year, because he takes some of his RMD as a taxable distribution and some as a QCD. In that discussion he asked me if he could donate his QCD to a donor advised fund, or DAF. As another aside, a DAF is a charitable investment vehicle that some donors use in their tax planning for a variety of reasons.

However, the answer to William was, no, he could not. While the U.S. tax code allows qualified charitable distributions to tax-exempt non-profits, they cannot be made to donor advised funds. As always, you should speak with your tax professional if you are considering using a QCD or a DAF as a part of your charitable giving strategy.

Securities and advisory services offered through LPL Financial, a registered investment adviser.  Member FINRA / SIPC.