Qualified Charitable Distributions (QCDs) are a powerful and tax-efficient way for eligible donors to support nonprofit organizations using funds directly from their retirement accounts. While QCDs are a valuable charitable giving tool, they operate differently from online donations, stock gifts, or ACH transfers since they are typically processed entirely through the donor’s IRA custodian
This guide explains what QCDs are, how they typically work, and what donors and nonprofits should expect.
What is a Qualified Charitable Distribution (QCD)?
A Qualified Charitable Distribution (QCD) allows eligible donors to give directly from their Individual Retirement Account (IRA) to a qualified nonprofit organization.
Instead of withdrawing funds personally and then making a donation, the donor instructs their IRA custodian (such as Fidelity Investments, Charles Schwab, or Vanguard) to send the funds directly to the nonprofit.
By donating in this manner, the distributed amount:
Counts toward the donor's Required Minimum Distribution (RMD)
Is excluded from the donor's taxable income
QCD Requirements include:
The donor must be 70 and 1/2 years or older at the time of the distribution.
The distribution must come from an IRA. Note that employer-sponsored retirement plans such as 401(k)s and 403(b)s do not usually qualify.
The funds must be transferred directly from the IRA custodian to the nonprofit organization.
The receiving organization must be a qualified 501(c)(3).
As of 2026, the annual maximum amount that an individual can distribute as a QCD is $111,000. Please see more information here and note that the QCD limit is subject to change very year.
How QCDs Typically Work
QCDs are handled entirely by the donor's IRA custodian. The standard process is:
The donor contacts their IRA custodian and requests a Qualified Charitable Distribution.
The custodian verifies eligibility and processes the request.
The custodian sends payment directly to the nonprofit -- most commonly by paper check mailed to the organization.
The nonprofit deposits the check and records it as a donation.
It is important to note that the donor must initiate the transfer and only their IRA custodian can facilitate that transfer. Importantly:
QCDs are not stock transfers.
QCDs are not processed through donation platforms.
QCDs do not require the nonprofit to have a brokerage account.
Can QCDs Be Sent Electronically?
Traditionally, QCDs are sent via paper check directly from the IRA custodian to the nonprofit.
In some cases, a custodian may allow funds to be sent via wire transfer instead of check.
Infinite Giving can help the nonprofit receive an incoming wire transfer provided the nonprofit has an Infinite Giving investing brokerage account.
We can provide the nonprofit or the donor with wire instructions. The donor would then give those wire instructions to their IRA custodian to request the distribution via wire.
Please note: Infinite Giving does not initiate or process QCDs. The donor must coordinate directly with their IRA custodian.
Important Notes for Nonprofits
QCDs Do Not Trigger Automated Donation Receipts
Because QCDs are processed outside of standard donation systems:
They do not trigger any automated receipts through a platform.
The nonprofit must manually issue a written acknowledgement to the donor.
For tax purposes, the acknowledgment should confirm:
The donation amount
The date received