Tracking QCD (Qualified Charitable Distribution) Gifts in DonorDock
Qualified Charitable Distributions (QCDs) are a unique type of gift that require special handling in DonorDock to ensure accurate reporting and receipting. This guide outlines how to properly record, acknowledge, and track QCD gifts within your database.
What Is a QCD?
A Qualified Charitable Distribution (QCD) is a direct transfer from a donor’s IRA to a nonprofit organization. Donors aged 70½ or older can use QCDs to satisfy their Required Minimum Distribution (RMD) while excluding the amount from their taxable income.
Because of this tax benefit, QCDs are a common and valuable form of giving.
Steps at a Glance
Record the gift on the donor’s contact record
Set the Non-deductible amount to match the received amount
Add clear notes identifying the gift as a QCD
Send a proper acknowledgment with the required language
Optionally tag the gift for reporting and tracking
Full Navigation Steps
Step 1: Enter the Gift on the Correct Contact
QCD gifts should always be recorded on the donor’s contact record, not the IRA custodian.
Even though the payment is sent by a financial institution (such as Charles Schwab, Fidelity, or Vanguard), the donor is the true source of the gift.
Example:
If Bob Smith directs his IRA at Charles Schwab to send a check, the gift should be recorded under Bob Smith, not Charles Schwab.
Step 2: Enter Key Gift Details
When creating the gift, use the following field values:
Field | What to Enter |
|---|---|
Contact | The donor (e.g., Bob Smith) |
Gift Amount | Full amount received |
Non-Deductible Amount | Should match full amount received |
Gift Type / Payment Method | Check (or a custom type such as “QCD” or “IRA Gift”) |
Notes | Indicate the gift was a Qualified Charitable Distribution from an IRA |
⚠️ Important:
QCDs are not tax-deductible. Setting the non-deductible amount to match the received amount is required and ensures the gift is excluded from tax-deductible contribution statement totals.
Step 3: Send a Proper Acknowledgment
QCD donors must receive a receipt that includes specific information for tax reporting purposes.
Your acknowledgment should:
State the full gift amount (e.g., “Thank you for your QCD of $5,000”)
Clearly show $0 as the tax-deductible amount
Confirm that no goods or services were provided
Identify the gift as a Qualified Charitable Distribution from an IRA
Donors will use this information when reporting the gift on their tax return (Form 1040).
Important Considerations
No goods or services may be provided
QCDs cannot be used for auction items, event tickets, sponsorships, or any benefit. If the donor receives something of value, the gift no longer qualifies as a QCD.QCDs will not appear on contribution statement totals
Because the deductible amount is $0, these gifts are excluded from standard tax-deductible reports and statements.
Optional: Tagging QCD Gifts
To make tracking easier, consider using a Gift Tag or Custom Field to label QCD gifts (for example: “QCD” or “IRA Gift”).
This can help your team:
Run reports on QCD giving activity
Ensure QCD gifts are handled correctly in receipting
Identify donors who give through IRAs for future stewardship
Otto Tips
🧭 Record the donor, not the custodian: Even if the check comes from a financial institution, the donor is the giver.
📋 Use clear acknowledgment language: Proper receipts are essential for donors to report their QCD correctly.
🎯 Tag for visibility: Flagging QCD gifts makes reporting and stewardship much easier.
