A new tax rule just made it easier for septuagenarians to support their favorite causes.

A special provision passed in the Pension Protection Act of 2006, which allows for special disbursements to charitable organizations, has recently been made permanent. The PATH Act, signed in December 2015 makes permanent a provision allowing people to direct funds from their IRA retirement accounts to charitable causes. Individuals 70½ and older are allowed to make donations up to $100,000 from their IRA without having to recognize the donation as income.

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Sifting through all of the legalese, this basically means retirees can now donate the money they have saved in retirement funds without having to first transfer it out of their IRAs and report it as income on their taxes.

The new rule shift stands as potentially a very big windfall for charitable organizations.

According to a 2017 study commissioned by the Blackbaud Institute for Philanthropic Impact, persons 68 and older are responsible for 26 percent of all charitable contributions, giving more money per capita than any other age group.

These trends, and the potential impact of the new IRA provision, have not gone unnoticed. Under the now-permanent rule, contributions from IRAs can be made tax free to operating non-profits like Norristown’s own Centre Theatre as well as funds held by community foundations like MontcoCAC, which passes its funding through to community causes.

Local operating non-profit Elmwood Park Zoo – which sees a weighty percentage of its individual contribution revenue come from large, lump sum donations by staunch supporters – is excited to spread the word.

“Being almost a century old, we have a lot of donors with long-running personal connections to the zoo,” noted Jen Conti, the zoo’s development director. “Some of our most impressive recent achievements – like the incredible new Thomas Kimmel Playground and Percussion Garden – came from donations by individuals that could have qualified under this new provision. We see a lot of possibilities through the new rule: we have a lot of older fans and guests who are excited to become donors and see the change they can make in their community, and this gives them that extra bit of incentive to make that plunge.”

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