Tracking QCD (Qualified Charitable Distribution) Gifts in DonorDock
Qualified Charitable Distributions (QCDs) are gifts made directly from a donor's eligible IRA to a qualified charitable organization. Because these gifts receive different tax treatment than a standard charitable contribution, record them carefully in DonorDock to support accurate gift tracking, contribution statements, and donor acknowledgments.
What Is a Qualified Charitable Distribution?
A Qualified Charitable Distribution (QCD) is generally a distribution made directly from an eligible IRA to a qualified charitable organization on behalf of an IRA owner who is at least age 70Β½ when the distribution is made.
A QCD can also count toward all or part of a donor's Required Minimum Distribution (RMD), when an RMD applies.
Because an eligible QCD is generally excluded from the donor's taxable income, the donor generally cannot also claim that same excluded amount as a charitable contribution deduction.
Record a QCD in DonorDock
A simple recommended workflow is:
Record the gift on the individual donor's Contact record.
Enter the full amount received as the Received Amount.
Enter the same amount as the Non-Deductible Amount.
Record that the contribution was a QCD using a Payment Note, Gift Tag, Custom Field, or other internal tracking method.
Send an appropriate acknowledgment to the donor.
Step 1: Record the Gift on the Donor's Contact
Record the QCD on the individual donor who directed the distribution, rather than creating the gift on the IRA custodian or financial institution that issued the payment.
For example, Bob Smith directs his IRA held at Charles Schwab to send your organization a $5,000 QCD. Record the gift on Bob Smith's Contact record, even though Charles Schwab issued the check or payment.
This keeps the contribution associated with the donor's giving history and allows your organization to continue tracking and stewarding the donor appropriately.
Step 2: Enter the Gift Details
When creating the gift, we recommend recording the following information:
Gift Field | Recommended Entry |
|---|---|
Contact | The individual donor who directed the QCD |
Received Amount | Full amount received by your organization |
Non-Deductible Amount | Same amount as the Received Amount |
Payment Type | The applicable payment method, such as Check, or a custom Payment Type created by your organization |
Payment Note | Note that the gift was received as a Qualified Charitable Distribution from an IRA |
For example, if your organization receives a $5,000 QCD:
Received Amount: $5,000
Non-Deductible Amount: $5,000
Tax-Deductible Amount: $0
DonorDock automatically calculates the Tax-Deductible Amount by subtracting the Non-Deductible Amount from the Received Amount.
π‘ Setting the Non-Deductible Amount equal to the Received Amount prevents the QCD from being included as a tax-deductible contribution in DonorDock's contribution statement totals.
Payment Type or Gift Tag?
There is no dedicated system Payment Type required for QCD gifts.
Your organization can use the standard Payment Type that reflects how the funds were received, such as Check, and use another field to identify that the gift was a QCD or you can create a custom payment type for QCD on your organization settings.
For example, you might use:
A Gift Tag named QCD
A Gift Tag named IRA Gift
The Payment Note field
A custom Payment Type created by an administrator
Whichever method you choose, consistency will make QCD gifts much easier to find and report on later.
Step 3: Acknowledge the QCD
QCD donors should still receive an acknowledgment of the contribution.
The acknowledgment should identify the contribution amount and state whether your organization provided any goods or services in exchange for the contribution.
For a QCD, your acknowledgment might include:
The full amount received
The date of the gift
Language identifying the gift as a Qualified Charitable Distribution from an IRA
A statement that no goods or services were provided in exchange for the contribution, when applicable
Because the gift was entered with a Non-Deductible Amount equal to the Received Amount, DonorDock will calculate the Tax-Deductible Amount as $0.
π‘ The donor is responsible for determining and reporting the tax treatment of their QCD. Your organization's acknowledgment should document the contribution rather than provide individual tax advice.
QCDs and Goods or Services
QCD eligibility has specific tax requirements, so organizations should be cautious about providing goods or services in connection with a contribution intended to qualify as a QCD.
If a donor intends a payment to qualify as a QCD but the contribution involves event tickets, auction purchases, sponsorship benefits, or another exchange of value, the donor should consult their tax or financial advisor regarding eligibility.
This distinction is especially important when recording the gift and preparing the donor's acknowledgment.
Contribution Statements
When a QCD is recorded with the Non-Deductible Amount equal to the Received Amount, its calculated Tax-Deductible Amount in DonorDock is $0.
This allows DonorDock to retain the full gift in the donor's giving history while preventing the amount from being included in tax-deductible contribution statement totals.
The gift itself remains available in Gift Reports and other areas of DonorDock for fundraising and stewardship purposes.
Otto Tips
π§ Record the donor, not the custodian. Associate the gift with the individual who directed the QCD so it remains part of their DonorDock giving history.
π Use the Non-Deductible Amount. Enter the full QCD amount as both the Received Amount and Non-Deductible Amount so DonorDock calculates a $0 Tax-Deductible Amount.
π¦ Track QCDs consistently. A Gift Tag, Custom Field, Payment Note, or custom Payment Type can make these gifts easier to identify later.
π Acknowledge without giving tax advice. Document the contribution and whether goods or services were provided, while leaving the donor's individual tax reporting to the donor and their tax professional.