By: Adena J. White

Overconsumption of processed foods has been linked to the rising rates of diabetes, hypertension and other chronic health conditions. Access and cost are the major barriers. 

To address these barriers and help improve the physical and economic health of Jefferson County, Communities Unlimited was recently awarded an “Access to Local Foods”’ grant from Arkansas Community Foundation to launch a “Food Farmacy” pilot program.

This program will provide enrolled families with access to fresh, nutritious food – as well as education and healthcare services – with the ultimate goal of improving their overall health.

Burthel Thomas is one of the growers that partners with the Food Farmacy. Thomas always aspired to be a farmer and now owns 275 acres in Jefferson County.

Part rural development hub and part community development financial institution, or CDFI, Communities Unlimited Inc. works alongside rural community leaders and small businesses to create fair access to resources needed to sustain healthy communities, healthy businesses and healthy families.

Brenda Williams, manager of Communities Unlimited’s healthy foods initiative, wrote the grant application for the Food Farmacy project in Jefferson County, expanding upon a similar grant-funded project the organization introduced in Clarksdale, Mississippi, back in 2020. Both projects are personal to Williams, who grew up in Blytheville, Arkansas, and now lives in Mississippi.

“Every person has the right to access
healthy and nutritious foods, no matter
where they live.”
— Brenda Williams

“I definitely consider myself a Delta girl or a country girl at heart,” she said. “Every person has the right to access healthy and nutritious foods, no matter where they live.”

Through her role with Communities Unlimited, Williams works with small-scale, underserved growers, mostly Black farmers, to help them build farm capacity as well as connect them with market opportunities where they can sell wholesale. The Food Farmacy program will purchase locally grown produce from small-scale growers to provide fresh produce to families in Jefferson County.

Burthel Thomas, a local grower from Pine Bluff, is one of the farmers partnering with Communities Unlimited on the Food Farmacy initiative. The Dumas native did not grow up on a farm but has always aspired to farm and own land. He turned his dream into a reality and now owns 275 acres in Jefferson County near Wabbaseka and Altheimer.

Through the partnership with Communities Unlimited, Thomas and other small-scale farmers in the area can obtain additional market opportunities while supplying people in their community with healthy foods.

“The Food Farmacy project is a win-win for me and my neighbors who farm because we can partner with each other. It improves our ability to market and provides more food to people on a larger scale,” Thomas said.

Beginning this summer, the farmers will provide an assortment of fresh produce – including sweet potatoes, tomatoes and sweet corn – to select Jefferson County residents through a local healthcare clinic in Pine Bluff. The clinic has identified 20 to 25 patients with chronic health issues to participate in the Food Farmacy program.

The 12-week pilot project will use the “food as medicine” model to address food insecurity and provide patients and their families with a produce voucher to be redeemed at the Food Farmacy for locally grown produce. Similar to a traditional pharmacy, the idea behind the Food Farmacy is to write patients a “prescription” to eat healthy foods to improve their health and help them better manage their underlying health conditions. It will also incorporate services that include behavior-change coaching along with cooking demonstrations by nutrition educators to support patients in the development of healthy eating habits.

“Our aim with this pilot is to help bridge the divide between food insecurity and healthcare by providing healthy foods, clinical services and nutrition education to patients,” Williams said. “We definitely want to provide nutrition education and recipes so that we’re not just giving these families produce and telling them, ‘Now go and eat well.’ The idea is to equip them with the know-how for preparing the produce that is in their boxes.”

To measure the impact of the program on health outcomes, Communities Unlimited will collect baseline labs and biometric data at the beginning of enrollment.

“Our hope is that by providing fresh, healthy foods, we will see changes in behavior that will influence the health of the participants in positive ways while supporting small-scale growers in Jefferson County,” Williams said.

Urban Patchwork and its network of growers promote urban farming across Pulaski County

By Adena J. White

“Growing food is in my blood.”

For Gabe Bland, farming is part of his lineage. The Elaine, Arkansas, native comes from a family of sharecroppers. He calls Little Rock home, too, splitting his time between Elaine and the capital city as a child and eventually graduating from Little Rock Central High School.

Bland’s rural and urban upbringing are what fuels his passion. He uses both the process of farming and the food he produces to connect people. He is building relationships with neighbors and other community members – while educating them about urban farming practices and providing healthy foods.

Gabe Bland, a native Arkansan, comes from a family of sharecroppers. He uses both the process of farming and the food he grows to connect people.

Connecting the Community through Food

Bland began operating his third urban farm, Turtle Island, in the South End neighborhood of Little Rock, which runs south of Roosevelt to Interstate 30, in June 2022. An experienced property manager, he saw an opportunity to purchase lots that once housed vacant apartment buildings, transforming 3314 South Arch Street into a small farm and roadside food stand.

Through a partnership with Urban Patchwork, Bland plans to expand Turtle Island into a neighborhood food hub and commercial kitchen for growing, storing, selling and socializing around food in the South End. His vision is to bring the community together by hosting block parties, cookouts on a hibachi grill where guests can prepare and eat food grown on the farm, gardening classes and even yoga sessions.

“I want this to be more than just a store,” he said. “We want to bring people together around food.”

Urban Patchwork is a nonprofit network of farmers and backyard gardeners with a shared goal to increase access to fresh food in urban neighborhoods. For the past eight years, experienced growers like Bland who are part of the network have provided materials, tools, hands-on learning experiences, administrative assistance and marketing opportunities to community members. Turtle Island will serve as an educational space centralizing regional resources to help people in low-income, low-access neighborhoods – as designated by the U.S. Department of Agriculture – become more self-reliant.

Gabe Bland, Jimmy Parks, Neil Denman and LeRoi Emerson are all leaders for Urban Patchwork.

“The farms that are part of Urban Patchwork are not all large urban farms like Gabe’s,” said Dr. Jimmy Parks, executive director of Urban Patchwork. “Some people have small, raised-bed gardens while others may build a chicken coop in the backyard so they can have chickens and eggs. There is activity going on all over town, and we want to help remove any barriers – either real or perceived – that may prevent people from urban farming.”

While access to healthy food is important, bringing people together around food in the South End neighborhood, or any neighborhood, is an equally big part of what Urban Patchwork is all about.

“Motivating people to eat healthy food is not our objective, but I think if they’re around it, see that it tastes good and are able to have some fun growing and cooking it, they will naturally eat more of it.”

Educating Community Members about Urban Farming

Through hands-on learning experiences, Urban Patchwork aims to equip people of all ages with the skills necessary to practice sustainable urban farming. Educational opportunities include building garden beds and picnic tables, growing mushrooms, preserving food and harvesting chickens.

“We try to turn everything we do into a class,” Parks said.

Community members who participate in Urban Patchwork’s learning opportunities leave with a better understanding about what is possible to produce on a small amount of land.

“You don’t have to have a lot of space to be able to produce a fair amount of food,” said Urban Patchwork board member Neil Denman. “It can be done in anybody’s yard, apartment patio or terrace, or right outside of an office. You can garden just about anywhere.”

Another benefit to educating people is to help them expand their palate. Bland said that many people buy the same produce because they may not know how to prepare foods they are unfamiliar with.

“I admit that I didn’t know what arugula was,” he said. “Even though I was eating it in a mixed salad. I want to help expose people to different types of healthy foods and teach them how they can pair and prepare them.”

Increasing Access to Healthy Food

Through its network of urban farms across Pulaski County, Urban Patchwork aims to expand access to fresh, local food in neighborhoods that do not have a grocery store within walking distance of their home. One purpose of the project at Turtle Island is to increase the capacity of the neighborhood food hub to provide local food to the 2,300 residents in the South End neighborhood.

LeRoi Emerson, vice president of Urban Patchwork’s Board of Directors, examines some of this season’s seedlings.

When successful, Parks expects that the community will be less dependent on stores and providers outside of their neighborhood. The ultimate goal is that the health of these neighborhoods – both the physical health of the residents and the social cohesion – will improve as more people grow, prepare, eat and share local food.

“One reason people have limited access to local food is that they just don’t know where to get it,” Parks said. “The Turtle Island project is a way to introduce people to one another at food- and garden-related social events in the South End neighborhood.”

Since opening nearly a year ago, Turtle Island has provided fresh, nutritious produce from more than 20 local growers to neighborhood customers. Consistent with its commitment to education, customers receive a recipe card with each purchase on how to prepare the food. The stand at Turtle Island is currently open one day a week for four hours, weather permitting, with plans to expand its hours, recruit more local food producers, and host more events and classes once the commercial kitchen is constructed.

“We want to make it a whole thing,” Bland said.

If you are looking for a flexible, convenient and cost-effective way to support the causes you care about in Arkansas, you may want to consider creating a donor advised fund (DAF) at Arkansas Community Foundation.

A DAF is a charitable giving account that allows you to make tax-deductible donations of cash, stock or other assets, and then recommend grants to your favorite nonprofits over time. You can also involve your family members or other advisors in your grantmaking decisions.

By creating a DAF with Arkansas Community Foundation, you can enjoy the following benefits:

To learn more about creating a DAF with Arkansas Community Foundation, you can contact their development staff or visit their website. You can also explore Aspire Arkansas, an interactive online report that provides data and information on the quality of life in each county of the state.

Creating a DAF with Arkansas Community Foundation is a smart way to give where it matters most. You can create positive change in your community with the help of the Foundation’s resources and expertise.

Let us help! Contact our Development team to get started today.

By Kim Dishongh

The landscape is changing in and around Elaine in Phillips County, as unkempt, often litter-strewn vacant lots are being replaced by neat rows of peas, peppers, tomatoes and more.

It makes for a more appealing view. Aesthetics aside, this evolution is helping to educate, employ and nourish residents of the little Arkansas Delta town.

James White, director of the Elaine Legacy Center, has made it his mission to improve life for the 600 or so residents of Elaine. One way to do that, he hopes, is to encourage people who own vacant lots around town to allow the Legacy Center to clear them, till them and find people to turn them into gardens.

James White, director of the Elaine Legacy Center, has made it his mission to improve the life for the 600 or so residents of Elaine.

White grew up helping his grandparents on their farm, and he formed lasting memories around the fresh produce they grew there.

“Back then, you lived off of your garden. Everybody around here used to have one,” he said. “They don’t anymore. People stopped doing that some time back.”

Not only are fewer people in Elaine growing fresh produce themselves, they often run into challenges buying it.

“From Elaine, we have to drive 20 or 30 minutes to get to a grocery store where we can get fresh vegetables,” he said. “There’s not anywhere here you can just go buy stuff like that.”

Dr. Mary Olson, spokesperson for the Legacy Center, said access to fresh whole foods is one issue, and so is poverty. Fresh produce costs more – and spoils faster – than packaged foods. People may not be able to afford the higher-priced, albeit healthier foods, and they also may not have the time or kitchen tools to prepare it.

Lenora and Edward Marshall are donating some of their land to the project. Lenora is the vice president of the Elaine Legacy Center.

“The mission of the Legacy Center is two-pronged,” Olson said. The nonprofit was formed by descendants of Black Elaine residents who were killed during violence that erupted in 1919 as Black workers sought to receive better payments for the crops they harvested.

“It is, first of all, the research, preservation and sharing of the oral histories of Elaine on which to build a foundation for a poverty-free Elaine. It is also a service wing to Elaine right now that recognizes that most of the people are in poverty, and while people are still in poverty, as we wait for the heritage and tourism to eliminate it, we serve as a community. So we are big time on closing the food gap, working with teenagers and doing what the community needs to have done – and wants to have done.”

Elaine Legacy Center supporters have traditionally grown collard greens, purple hull peas and okra on their own grounds and have given much of that produce to people in the community. They also have several plots of cacti.

Junior Mora grows and harvests cactus planted outside the Elaine Legacy Center.

“Cactus is the healthiest vegetable known to humanity,” Olson said. “It is niched in the Hispanic Mexican culture and because we have a strong Hispanic population with whom we work, we started growing cactus.”
The flavor, she said, is similar to green beans, and it can be roasted, eaten raw in a salad, boiled or juiced.

“One of our goals is to get it out of just the Hispanic culture and into the general public,” said Olson.

White started a farmers’ market in Elaine where smallholder farmers working in the vacant lot initiative could sell their harvests — and where Elaine residents could buy fresh fruits and vegetables locally. To increase the diversity of the market, White has occasionally traveled to other parts of the Delta to pick up produce to offer patrons. His goal is to support the farmers in the program to diversify their crops so they can grow the crops that are most in demand.

“We’re also planning for teenagers to work in the gardens this summer,” Olson said. “We are hoping that this will be so successful that some of our young people can get agricultural degrees while they are growing vegetables to make a profit. Then they can come back to Elaine earning enough money in this kind of vegetable production to make a better income here than they would make going somewhere else. So, we have high hopes for this.”

The Legacy Center is working to recruit teenagers to work in the gardens with the hope that it will spur interest in farming and keep youth from leaving the town.

Scottie Smith of Lexa has helped plow gardens for the Elaine Legacy Center for several years. For the last couple of years, he has tended gardens of his own as well.

“I started doing it because other people had asked me to till up gardens for them,” said Smith, whose gardens are in Helena. “I had a couple of acres so I decided I would start doing it myself, too.”

Smith’s paternal grandparents farmed, and he worked on farms growing up.

“But I wasn’t growing anything when I worked on the farm,” he said. “I was cutting and chopping and stuff like that, but I didn’t know anything about the planting. I’m still learning that now.”

Smith, whose full-time job is driving trucks for the city of Helena/West Helena, is growing cucumbers, squash, greens, tomatoes, peppers and watermelons, and he also raises chickens. He shares produce and eggs with people in his area who he knows need them. The pandemic and subsequent inflation have created hardships for many, he knows.

“I get to help,” Smith said. “I just try to help people get fresh vegetables in the area because there’s a lack of it here. I try to sell, and sometimes I just give it to them. Outside of that, we just try to feed our family here and keep them healthier.” Smith enlists the help of his 10-year-old son, and he hopes he will learn along with him.

“I want to make money, too, and Dr. Olson introduced me a couple of weeks ago to a guy that proposed to help us sell food to the food bank,” said Smith. “We’re looking at planting a couple of acres of just peas. I don’t know yet how that’s going to go.”

Olson expects to see more vacant lot farms this year, as well as growth in some put in in years past. There will also be a few new gardens outside Elaine, she said.

“All of us at the Elaine Legacy Center are grateful for the two years of funding from Arkansas Community Foundation,” Olson said. “This funding allows us to strengthen vacant lot farming in Elaine and expand it to other places, as well as add collaborators.”

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Elaine Legacy Center received an “Access to Local Foods” grant from Arkansas Community Foundation in 2022 to help increase Arkansans’s access to locally grown food.

The Community Foundation is committed to working with you and your family to fulfill your charitable goals, whether those goals relate to making an impact, leaving a legacy, saving money on taxes, expressing gratitude, or a combination of objectives. If you have not yet established a fund at the Community foundation (and even if you have!), it might interest you to know that a donor-advised fund or other type of fund not only offers flexibility to meet your giving goals, but also gives you options for recognition or anonymity, depending on your goals and preferences.    

Many philanthropic individuals and families appreciate–and sometimes even seek–recognition for gifts to their favorite charities. In addition to feeling appreciated, donors give publicly for many other reasons, including knowing that their names can lend credibility to an organization and that their gifts can serve as an inspiration to other donors. Our team at the Community Foundation also understands the perspectives of nonprofit organizations about anonymous giving. This means we can help you navigate your relationship with a favorite charity, which in turn allows us to help ensure that your intentions are achieved and the nonprofit’s mission is supported in the way you envision.

The Community Foundation carries out your wishes for recognition in a variety of ways.

When you recommend grants to your favorite charities from your donor-advised fund the Community Foundation will typically issue the grant checks to the charities noting that the gift is from your fund so that you receive the recognition. Sometimes, though, fundholders have good reasons for wanting their support to be anonymous, whether because of modesty, religious convictions, avoidance of unwanted solicitations, or wanting to keep the focus on the charity.  

Whatever the reasons you might prefer to give anonymously, whether from time to time or across the board, the Community Foundation respects your wishes and can help in a variety of ways.  More details can be found on our blog here. (Jump to rest of the article/blog)

–First and foremost, our team will listen intently to understand your charitable goals and interests and make sure that we are structuring your fund(s) to achieve your charitable giving and family philanthropy goals. Indeed, some individuals and families set up multiple funds to serve different needs, including the desire for anonymity for a portion of their giving but not all. Our team will be sure to ask clarifying questions to determine how best to structure your charitable funds to achieve your desired level of recognition. Do you prefer anonymity for every grant? Is there a threshold amount where smaller grants can be acknowledged? Does the restriction apply only to a public disclosure by the grantee, but the grantee organization is itself aware? We know these discussions can be delicate. 

–You may wish to recommend that certain grants (but not all grants) from your fund be issued anonymously. The Community Foundation offers the ability to opt in to anonymity on a grant-by-grant basis. Also remember that no solicitations will flow directly to you; the Community Foundation handles all correspondence related to grants to nonprofits made from your fund.

–Remember that you can establish a donor-advised fund under a nondescript, less identifiable name, perhaps one that is generic sounding or honors ancestors who may have “seeded” the fund through a prior generation’s wealth transfer or inheritance. For example, you can select a name for your fund that is something less obvious than your own name. Instead of the “Morgan and Jordan and Smith Fund,” for instance, you could name the fund the “MJS Fund,” “Smith Family Legacy Fund,” or something else. When the Community Foundation sends a grant check to a charity from your fund based on your wishes, the charitable recipient will see only the name of the fund, not your name.  

–As always, with any fund (whether some or all of the grant making is anonymous) the Community Foundation’s code of ethics and operating principles mean that our team follows and enforces strict confidentiality. For example, we are careful about visibility and accessibility of donor information even internally, and we adhere closely to permissions and protections within the donor database.

–Finally, the Community Foundation does not disclose information about you or your fund to any third party, nor is detailed information available through a Form 990 filed with the IRS. 

At the Community Foundation, we’re here to serve the greater good. We welcome all conversations about giving, and we gladly strive to honor the charitable giving preferences of our donors and fund holders to the fullest extent allowed by law. 

With fears of economic downturn on the rise, many people are rightfully concerned about their finances. But in these moments, we also see a renewed interest in supporting charitable causes, begging the question — is there a way to save while you give?

The short answer is yes! As you form your charitable goals for the remainder of 2023, the Community Foundation wants to share a recession-smart giving option that not only benefits your finances but builds stronger communities in Arkansas: giving through a Qualified Charitable Distribution (QCD).

What is a QCD? Qualified Charitable Distributions are gifts made directly from IRA accounts. These gifts are eligible for community members 70 ½ and older. In addition to being excluded from your taxable income, QCDs are philanthropic options that can also help you fulfill a Required Minimum Distribution for 2023 (for more information on RMDs, check out this blog post).

Why consider a QCD gift this summer? Your gift:

  • Helps build stronger communities in Arkansas in real-time, especially when support is desperately needed.
  • Can help you reduce your future tax burden, allowing you to give and save.
  • Is easier than ever through the simple tool below, which helps us track your gift and thank you appropriately.

We know the state of our economy is of big concern. Community Foundation wants to provide you with relevant information so you can make the best recession-smart gift that is right for you.

The tool linked above is courtesy of FreeWill and walks you through the entire process of making your gift while providing you with helpful information if you want to learn more about QCDs. Note: If you are planning on creating a QCD, please use this resource so we can track your gift and thank you accordingly!

And as always, we recommend contacting and consulting with a professional advisor to determine the best philanthropic option for your personal circumstances.

As you talk with your clients about charitable giving, are you leading with tax benefits? Deferring philanthropy topics until November and December? Not looking at the big picture? According to a recent article, you may want to rethink your approach. The article points out the importance of engaging specialists to assist you in advising a client about how to make a difference in the community. Our team specializes in charitable giving and community impact. We’re just a phone call away. 

Over the last few months, many advisors have noticed an uptick in client inquiries about leaving their IRAs and other retirement plans to charity. It likely has a lot to do with the buzz about Qualified Charitable Distributions (QCDs), which allow those who’ve reached the age of 70 ½ to direct up to $100,000 annually to qualified charities (such as a designated or field-of-interest fund at the Community Foundation), avoiding both the need for an RMD (if they’ve reached age 73) and the income tax hit.  

It’s probably more than just the QCD, though, that has spurred your clients to ask questions. More and more, charitable planning with IRAs and other qualified retirement plans is a topic in financial and mainstream media. A case in point is a September 2022 article in the Wall Street Journal, irresistibly titled “Win an Income-Tax Trifecta With Charitable Donations.” If you subscribe to the Wall Street Journal, the article is well worth your time.  

When your client names a public charity, such as a donor-advised or other fund at the Community Foundation, as the beneficiary of a traditional IRA or qualified employer retirement plan, your client achieves extremely tax-efficient results. Here’s why:   

First of all, the client achieved tax benefits over time as the client contributed money to a traditional IRA (or to an employer-sponsored plan). That’s because contributions to certain retirement plans are what the IRS considers “pre-tax”; your client does not pay income tax on the money used to make those contributions (subject to annual limits). 

Second, assets in IRAs and qualified retirement plans grow tax free inside the plan. In other words, the client is not paying taxes on the income generated by those assets before distributions start in retirement years. This allows these accounts to grow rapidly.  

Third, when a client leaves a traditional IRA or qualified plan to a fund at the Community Foundation or another charity upon death, the charity does not pay income taxes (or estate taxes) on those assets. By contrast, if the client were to name children as beneficiaries of an IRA, for example, those IRA distributions to the children are subject to income tax, and that tax can be hefty given the tax treatment of inherited IRAs.  

So, if your client is deciding how to dispose of stock and an IRA in the client’s estate plan, intending to leave one to children and the other to charity, leaving the IRA to charity and the stock to children is a no-brainer. Remember, the client’s stock owned outside of an IRA gets the “step-up in basis” when the client dies, which means that the children won’t pay capital gains taxes on the pre-death appreciation of that asset when they sell it.  

Here’s the net-net:

Traditional IRAs are often poor vehicles for your clients to use to leave a family legacy. Instead, if a client is charitably inclined, traditional IRAs are likely better deployed to posthumous philanthropy if other assets, such as appreciated stock, are available to leave to children and other heirs. 

Our team at the Community Foundation is always happy to work with you to ensure that your clients are maximizing their assets to fulfill their charitable giving goals. 

ARKADELPHIA, ARK. (April 17, 2023) – Earnestine Hatley of Arkadelphia, Ark., has been named executive director of Clark County Community Foundation, an affiliate of Arkansas Community Foundation that supports countywide nonprofit organizations through funding, networking and capacity building opportunities.

“Earnestine has a strong desire to work with others in her community to make a positive impact,” said Heather Larkin, president and CEO of Arkansas Community Foundation. “The Clark County affiliate office has a long history of strong leadership and I’m thrilled to continue that tradition. Earnestine is a wonderful asset for the affiliate office and the community.”

Born in Beirne, Arkansas to Andy and Christine Hatley, Earnestine is the seventh child of 12 children. She served 23 years active duty in the military. During her service her three biggest achievements were serving the country as a soldier and a civilian, receiving the Bronze Star Medal for service during Operation Iraqi Freedom, serving in Kuwait and Iraq and receiving the Superior Civilian Service Award. She has been fortunate through her military and civilian service to have lived and traveled extensively around the world and recommends travel to all. Earnestine loves interacting with people and is very passionate about her community.

Clark County Community Foundation was established in 2002 and is governed by a local board of directors. For more information about the Foundation’s work in Clark County, including information about local grants and how to apply, visit www.arcf.org/clarkcounty or call 870-290-3162.

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Arkansas Community Foundation, a statewide nonprofit organization, provides resources, insight and inspiration to build better Arkansas communities – communities where our kids will want to raise their kids. The Community Foundation is the largest grantmaker in the state in the number of grants made each year. Since 1976, the Foundation has provided more than $393 million to nonprofits. The Foundation staff works directly with donors, professional advisors and nonprofits to help strengthen Arkansas communities through strategic philanthropy and focusing on local needs. Its assets rank among the top 60 out of more than 800 community foundations in the United States. Serving statewide and local initiatives, the Community Foundation helps connect those who want to give to causes they care about. Contributions to Arkansas Community Foundation, its funds and any of its 29 affiliates are fully tax deductible.

If you get cross-eyed when you start reading about Required Minimum Distributions (RMDs) and Qualified Charitable Distributions (QCDs), you are not alone! Given the December 2022 passage of SECURE 2.0 legislation, changes to RMD rules are especially important to understand if you are involved in charitable giving and have reached the age of 70 1/2. 

What is an RMD in the first place? 

A little history may help here. RMDs date back to 1974 when the Employee Retirement Income Security Act (ERISA) was enacted. This was to provide pension reform and to offer a retirement savings vehicle to non-pensioned workers through vehicles referred to as “qualified retirement plans,” which are allowed to grow tax-free while assets are in the plan. 

By requiring that a taxpayer start taking distributions from qualified retirement plans when the taxpayer reaches a certain age, the United States government can start collecting tax revenue on “required minimum distributions” from assets which have grown tax-deferred for all those years.  

Now here is where we get into the weeds…The distributed amount of the RMD is reported by the plan administrator on IRS Form 1099-R. But not if the RMD was “satisfied” by a Qualified Charitable Contribution (QCD)—see below! A taxpayer enters this amount on Line 4B of the Form 1040 Federal income tax return, and, of course, the amount is included as taxable income for the year it was distributed. The net-net here is that RMDs add to taxable income but not in the case of direct transfers to qualifying charitable organizations (the QCD.)

You still with us? 😊 

What types of accounts require RMDs?

For 2023, account owners aged 73 and older who participate in qualified retirement plans such as these are subject to RMDs: 

  • Traditional IRA
  • Simplified Employee Pension (SEP)
  • SIMPLE IRA
  • Employer-sponsored 401(k), 430(b) or 457

Once begun, RMDs occur annually, until account depletion or the owner’s death. (Distributions must also be taken from inherited IRA accounts, though under different rules.)

How is the RMD amount calculated? 

A qualified retirement account’s entire balance is considered for calculating an RMD, although of course only a fraction of the balance must be distributed each year. Unfortunately, the distribution amount is not easily or consistently determined. This contributes to some retirees’ confusion about RMDs and the requirements. Online RMD calculators can be found here or here, and your retirement account administrator can provide guidance. 

When do the RMDs start? 

That’s tricky too! For years 2023 – 2032, the start date is your age: 73 calendar year. For example, an account owner born in 1955 would begin in 2028. 

The big benefit of a later RMD start age comes from retaining account balances longer. You avoid adding unnecessarily to your taxable income and therefore reduce the risk of bumping to a higher tax bracket. Prior to SECURE Act changes, RMDs began at age 70 ½ and age 72. So taxpayers can now enjoy a few more years of tax-free investment growth. 

How charitable taxpayers can check the RMD box with a QCD

Here’s where the QCD comes in (finally!) Armed with an understanding of how the RMD rules apply to your situation, you can begin to see how the QCD can provide a huge benefit if you own IRAs. QCDs are truly taxpayer and charity-friendly vehicles. 

For starters, you can start making QCDs at age 70 ½ – well before you’ve reached the age when you’re required to take RMDs. A QCD happens when you direct a distribution from an IRA of up to $100,000 annually (or $200,000 if you file tax returns jointly) to one or more qualifying charitable organizations.

These organizations can include a designatedfield-of-interest, or unrestricted fund at the Community Foundation. While the QCD is itself not tax deductible per se, the overall effect of the QCD lowers your taxes since the QCD counts toward your RMD but, unlike an RMD, is not included in your taxable income. 

Whew!

The bottom line? If you have:

  • reached the age of 70 1/2,
  • own an IRA,
  • care about charitable causes,
  • and don’t need a full RMD as income to cover your living expenses,

reach out to the team at the Community Foundation to learn how a QCD could work beautifully for you!  

Ready to make a QCD right now? We make it EASY to recommend QCDs from your IRA with just a few clicks! 

We look forward to working with you and your family this spring to set in motion your charitable goals for 2023! Please reach out anytime.