04.15.2009 - 

An Immediate Impact Fund is designed to accept contributions made to the Community Foundation through a Charitable IRA Rollover, which was made possible by the Pension Protection Act of 2006 and extended by Congress in 2008 for tax years 2008 and 2009. Qualified donors may make distributions of up to $100,000 directly from their Individual Retirement Accounts (IRAs) and not include it as income. An Immediate Impact Fund is not an endowment. Rather, it is a designated fund that allows you to distribute grants directly to the charities that you name, in the time frame that you designate.

Questions and Answers

Who is eligible for creating an Immediate Impact Fund?
A person must have reached age 70 by the date the distribution is made through a Charitable IRA Rollover.

How long is this opportunity available?
This opportunity is available only in 2008 and 2009.

Can I sign over my IRA distribution check to you to create this fund?
No. The IRA distribution must come directly from your IRA account to the Community Foundation; you cannot “sign over” an IRA distribution check that was made out to you.

How much is required to open an Immediate Impact Fund?
At least $25,000 is required to open an Immediate Impact Fund, and it cannot exceed $100,000.

How much does it cost?
There is a 2% administrative fee for this fund. Additionally, we retain any earnings from the fund while it is on deposit in the Foundation.

How many charitable organizations may I name to receive grants?
You can name up to five charitable organizations to receive grants from the fund and each grant must be at least $1,000.

When will grants be distributed?
Grants will be distributed within 90 days of receiving the contribution, unless you designate in advance that the grants will be distributed over a longer period of time.

How much of a charitable tax deduction will I receive?
There is no charitable deduction for distributions from you IRA to the Community Foundation. However, you do not have to recognize the distribution as income, so there is no tax due.

Is there any paper work involved?
Yes. You will need to coordinate the rollover distribution to The Community Foundation of Louisville with your IRA plan administrator. But before you make the rollover gift, you will need to finalize an Immediate Impact Fund Agreement with the Community Foundation. Please be sure to allow sufficient time for this agreement to be completed before you make the gift.

Would you provide an illustration of how the Immediate Impact Fund works?
In 2008, John Doe “rolls” $100,000 from his IRA to the Community Foundation for his new Immediate Impact Fund. Before he made his rollover gift, he worked with the Community Foundation staff to create a fund agreement that designates irrevocably up to five charities: in his case, a local hospital, his church, the public library, his alma mater and a community theatre. The agreement also specifies the percentages or amounts he wishes to grant from the fund to each charity. In this way, he’s able to immediately benefit his favorite causes. He can even work individually with his alma mater to use the grant from his Immediate Impact Fund to create a scholarship fund named for his wife.

In 2009, he again makes the entire rollover amount of $100,000 to the Community Foundation for his Immediate Impact Fund. In his 2009 fund agreement with the Foundation, he requests that we send grants of $20,000 annually over the next five years to his church. He has historically “tithed” about $20,000 per year. With this new giving incentive, he can take advantage of the Charitable IRA Rollover to fund his annual gifts for the next five years. Other options for his 2009 fund agreement would be to make grants to the same five charities he supported in 2008 or he could designate up to five other charities to receive grants.

Are there other options at The Community Foundation of Louisville for an IRA rollover gift in addition to the Immediate Impact Fund?
Yes.  You could make a charitable IRA rollover gift of any amount to our Unrestricted Community Grantmaking Fund (minimum $5,000 for a named fund); you could create a permanent endowment fund designated for your specific charitable purposes (minimum $25,000); or you can add a contribution of any amount to our more than 80 nonprofit agency endowment funds (click the .pdf link below for a list).

For more information about establishing an Immediate Impact Fund, please contact Linda Speed at 502.585.4649 or email lindas@cflouisville.org.