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Charitable Giving Legislation

The Pension Protection Act of 2006 (PPA)

Congress recently passed The Pension Protection Act of 2006 (PPA), legislation containing provisions that will have a very positive impact on charitable giving during 2006 and 2007. This tax law change is unusual, time-sensitive, and could greatly benefit ministries of NCM.

According to Larry Bollinger, Administrative Director of NCM, “This new giving opportunity comes at a strategic time for NCM. The global need has never been more significant and our ministries touch nearly every aspect of life: child development, disaster response, development education, and social transformation.”

PPA encourages tax-free charitable transfers directly from an Individual Retirement Account (IRA) or Roth IRA to qualified charities during 2006 and 2007. NCM is a qualified charity. Here is a quick summary of the provisions of PPA:

  • Donors must be at least 70½ years of age in the year of the gift
  • Transfers must be direct from the IRA to qualified charities
  • Up to $100,000 per taxpayer per year can transferred directly to charity (therefore, a married couple could each transfer up to $100,000)
  • The transfer is not included in taxable income and no charitable income tax deduction is allowed
  • Transfers will count toward your annual Required Minimum Distribution (RMD)

Nearly everyone who meets the age requirement can benefit, including those who:

  • Do not itemize deductions and therefore do not benefit from charitable gifts
  • Would rather not take a RMD and thereby increase taxable income
  • Already give up to 50% of AGI
  • Are subject to the 2% deduction limitation rules

“This is truly historic legislation from the standpoint of charitable giving. Until now IRAs have not been thought of as a source for charitable gifts. With this new law, IRAs can be considered a primary source of charitable giving for everyone who qualifies, no matter what the size of the gift or income level.” Dr. Melvin McCullough, President Church of the Nazarene Foundation

To take advantage of this opportunity you will need to give written instructions to your IRA custodian. Here are the instructions your IRA custodian will need:

Make a check payable to:

General Treasurer, Church of the Nazarene

Send distribution to:

Church of the Nazarene
6401 The Paseo
Kansas City, MO 64131

Since we anticipate many people will take advantage of this new legislation and these gifts will be coming from various IRA custodians to the General Treasurer's office please advise us if you are making a gift in this way so that we can be sure it will get credited to NCM.

NCM encourages you to consult with your own tax advisors about the impact of this new legislation on your personal situation. If you would like more information about this unusual opportunity please call our office toll free at (877) 626-4145.

If you are between the ages of 59½ and 70½ you can also utilize IRA assets for charitable giving with very little, if any, negative tax consequences. Contact us if you would like more information about this giving strategy, since the instructions for executing a gift are different.