The SECURE Act and Planned Giving Strategy

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TELL DONORS ABOUT NEW GIVING INCENTIVES

Understand new provisions that make some types of charitable contributions more appealing.

Note about communicating with donors during the COVID-19 pandemic: With uncertainty and changing landscape amid the COVID-19 pandemic, nonprofit organizations should exercise even higher than ordinary thoughtfulness and sensitivity in determining whether and when to send donor communications, including planned giving messaging. Many public media stations are postponing or reviewing current planned giving messaging to avoid upsetting supporters and others who may be particularly sensitive to messaging regarding estate planning. Additionally, the Coronavirus Aid, Relief,…

Note about communicating with donors during the COVID-19 pandemic:

With uncertainty and changing landscape amid the COVID-19 pandemic, nonprofit organizations should exercise even higher than ordinary thoughtfulness and sensitivity in determining whether and when to send donor communications, including planned giving messaging. Many public media stations are postponing or reviewing current planned giving messaging to avoid upsetting supporters and others who may be particularly sensitive to messaging regarding estate planning.

Additionally, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27th, 2020. This landmark legislation included some provisions related to or affecting charitable giving. The expanded provisions for Economic Injury Disaster Loans could be make-or-break for some organizations but have a more indirect effect on charitable giving. Three other pieces of the CARES Act relevant to charitable giving are:

  • The above-the-line deduction of up to $300 for non-itemizers (people who take the standard deduction on their income tax returns) who make cash gifts to qualified charities. This is a new incentive for a large number of individuals to make cash gifts to charity, where before they received no tax benefit from charitable giving.
  • The temporary increase of the 60% of adjusted gross income (“AGI”) deduction limitation to up to 100% of AGI for cash gifts to charities. This means that donors making large cash gifts can completely offset their income for 2020.
  • The suspension of required minimum distributions (“RMDs”) from qualified retirement accounts in 2020. This could mean that some people who otherwise would have made qualified charitable distributions (“QCDs”) from their IRAs this year might not.

If you decide to create messaging for your donors about either the CARES Act or SECURE Act changes, it may be advisable to combine them into one, with a theme in the vein of “recent changes in the law affecting charitable giving” and hit on key points of both.


The SECURE Act, or “Setting Every Community Up for Retirement Enhancement” Act was signed into law on December 20, 2019, as Division O of the Further Consolidated Appropriations Act, 2020. It consists of approximately 46 pages near the end of the larger 715-page bill, but there are three changes that most affect charitable gifts and gift planning:

  • The age for required minimum distributions (RMDs) from qualified retirement accounts is raised to 72 for donors turning 70½ in 2020 and beyond.
    • This did not change the minimum age for qualified charitable distributions (QCDs) from IRAs, which remains 70½.
    • Individuals who reached age 70½ in 2019 or earlier still must continue to take RMDs even if they are not yet 72.
  • The age restriction on contributions to IRAs is lifted, but that came with a corresponding rule that reduces eligibility for QCDs by the aggregate amount of post-70½ IRA contributions.
  • The “stretch” payout option for designated beneficiaries of qualified retirement accounts is largely eliminated and changed to a 10-year withdrawal window for most non-spouse beneficiaries.

Implications of the SECURE Act provisions:

  • People have more incentive than ever to give IRA and other qualified retirement account assets to charity, because now it is a little less appealing to designate those assets to family or other individuals in many cases.
  • Qualified charitable distributions (QCDs) from IRAs remain attractive, perhaps more than ever, but the rules regarding QCDs just got more complicated and could trip up those who aren’t paying attention.
  • Charitable remainder trusts (CRTs) funded with retirement assets at death are a potential solution to at least one of the planning problems caused by the recent changes. While it’s important to understand that and propose it as an option for donors in appropriate circumstances, be careful not to over-focus on CRTs, as they will be considered by a relatively small percentage of donors.
  • A bigger opportunity is beneficiary designations of qualified retirement assets made directly to charity at death, which deserves more marketing and should be discussed with donors more broadly.

Among the steps for your organization to consider:

  • Review your planned giving and IRA QCD web pages, as well as brochures, one-pagers, and any other donor-facing materials, and update for accuracy as necessary in light of the SECURE Act.
  • Review IRA QCD receipt templates for appropriate language, and consider adding a brief mention of post-70½ IRA contributions to flag a possible issue for donors who have made such contributions.
  • Increase communications to donors encouraging consideration of IRA QCDs (donors age 70½ or older) and making your charity a designated beneficiary of retirement accounts (all donors).
  • For more established and sophisticated planned giving programs, increase communications with older donors about life-income gifts (charitable gift annuities and CRTs) generally. The benefits of TCRUTs as a possible solution for those affected by the SECURE Act changes can be raised in this context.
  • Use the SECURE Act as a good reason to get in touch with donors, but don’t get too technical in communications. Simple, broad messaging with an invitation to a conversation is great. You can include links to more information for those who want it, or an offer to send more detailed explanations.
  • Make sure not to give or appear to give specific legal, tax, or financial advice, and do encourage donors to check in and talk with their professional advisors. Now is a prime time for many donors to be reviewing their plans, and you want your organization to be in their thoughts as they do.

Updated March, 2020.

For a more detailed explanation of the SECURE Act changes noted in this article and their effects on donor giving options, along with examples, QCD rules, CRT descriptions, and more, see a more in-depth version of this piece here.

Joe Thiegs

Greater Public Planned Giving Advisor

(612) 999-3940 (Central Time Zone)
jthiegs@greaterpublic.org
Main contact for planned giving