Case Study: A QCD Conversion in Action

Mar 31, 2026

If you understand the basics of Qualified Charitable Distributions (QCDs) but aren’t always sure how to guide the client conversation, you’re not alone. Whether you’re an attorney, CPA or financial advisor, consider this scenario:

Margaret, a 74-year-old client, reaches out to discuss her charitable giving and higher-than-expected required minimum distribution (RMD) income. She’s an existing donor advised fund holder at the Community Foundation.

In your meeting, she asks, "If I'm giving to nonprofits anyway, does a QCD make sense, especially if I want to continue organizing my charitable giving through the Community Foundation?” 

You explain that a QCD allows clients over age 70½ to give directly from an IRA to a qualified nonprofit, potentially satisfying an RMD while reducing taxable income.

Then comes the natural follow-up, “Can I direct my QCD to my donor advised fund?"

You clarify, “Under current IRS rules, QCDs can’t be made to donor advised funds because donors may retain advisory privileges over grantmaking decisions. This distinction places these funds outside the scope of the provision, which is intended to apply to contributions where no ongoing advisory role is maintained."

Instead, you outline alternatives, such as designated, field of interest or unrestricted funds—that can receive QCDs while still reflecting her charitable goals.

Margaret pauses, “I just want to make sure I get it right. I also want to be sure the fund is set-up properly and really reflects what I care about."

You suggest bringing in the Community Foundation to help structure the gift and ensure it aligns with both her intentions and QCD requirements.

By the end of the conversation, you’ve agreed on next steps: coordinate with her IRA custodian and work with the Community Foundation to establish a fund that can receive the QCD. The plan will allow Margaret to use her RMD to support the community she loves, reduce her taxable income and create a charitable structure she feels confident about.

Margaret leaves feeling confident – not just in the strategy, but in the approach.

Together, you and the Community Foundation can turn a confusing tax rule into a thoughtful charitable strategy that supports both Margaret’s personal financial goals and the broader community she intends to impact.

If this scenario sounds familiar, the Community Foundation is here to support you. We can help you navigate the details and deliver charitable solutions that work for your clients and the community.