Secure 2.0: Key Takeaways for Fundraisers
Tech Tuesday
By now, you may have heard that President Biden signed into law the Consolidated Appropriations Act of 2023. Included in this act is a provision referred to as Secure 2.0.
Major Takeaways:
- Raises the age for required minimum distributions, from 72 (in 2022) to 73 in 2023, and 75 in 2033.
- Individuals can make a one-time gift of up to $50,000 of IRA assets into a Charitable Remainder Trust or a Charitable Gift Annuity.
- The $100,000 cap on Qualified Charitable Distributions will be indexed for inflation starting in 2024.
You’re wondering … what does this mean and how does it impact fundraising and my donors?
What This Means for Fundraising:
- Fundraisers will lose another year of donors required to make distributions from their IRAs, which could impact QCD gifts. If a donor isn’t required to take money out of their IRA (that they might not need), they may be less inclined to make a gift or as big of a gift.
- Like many provisions, this looks better on the surface than it really is. Donors can only give to “new” agreements, and few financial houses will touch a CRT of $50,000. The provision also puts a floor on CGA distributions of 5% and makes all disbursements taxable.
- The best news of this act! Starting in 2024, donors will be able to make gifts greater than $100,000 to nonprofits and have them count as Qualified Charitable Distributions. This should help donor’s gifts keep pace with inflation–and their assets.
In the end, Secure 2.0 is a mixed bag for fundraising. We should take comfort in the fact that there are charitable items in the Consolidated Appropriations Act of 2023. As fundraisers, this legislation brings attention to the work that we do. BUT, it also reinforces that we need to focus on the emotional aspects of our work and marketing.
Donors need to understand the impact they can make
and that people like them, make gifts like this.