How should charity acknowledge qualified charitable distribution?

Normally, a donor must obtain a “contemporaneous written acknowledgment” of a cash contribution to a charity of $250 or more in order to claim a charitable contribution deduction for the gift.  The acknowledgment must describe the gift received, whether any goods or services were received in return, and if so, the value of the goods or services received.  (See Ready Reference Page: “IRS Requires Substantiation of Contributions”)

A Qualified Charitable Distribution (“QCD”) taken by someone over age 70½ (up to $108,000 in 2025) is not a deductible charitable contribution.  A QCD is probably better than a contribution for most donors because the full amount of the gift is deducted from the taxable amount of the distribution from the IRA account and is not considered income at all.  That is usually better than a deduction available only to the eight percent of all taxpayers who can itemize their deductions because their deductions exceed the steadily increasing standard deduction.

Even if an acknowledgment may not be technically required, it is clearly a best practice to give the donor an acknowledgment along with a thank you.  There are several key issues to consider, however.

• You should describe the gift as a check for $X from the IRA account investment manager, not from the donor personally.  This will alert a personal accountant preparing the donor’s personal tax return or an IRS auditor that it is a QCD and not a deduction.
• You should be able to say that no goods or services were received in return.  If services were received, like tickets to the annual fundraiser gala, the distribution does not qualify as a QCD and will be included in taxable income for the donor.  You may want to have the donor pay separately for the tickets.
• You should not say the gift is tax deductible — because it isn’t.
• And you should say thank you again.