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The IRA Charitable Rollover Gift Annuity Plan

Give from Your IRA and Receive a Lifetime of Payments

Donors over 70½ can receive a lifetime of payments in return for a contribution to Mount Holyoke College from their IRA account. This gift plan combines a charitable gift annuity and a Qualified Charitable Distribution (QCD) from an IRA. Let’s see how it works.

Charitable Gift Annuity — A charitable gift annuity is a simple contract between you and Mount Holyoke College promising to pay you a fixed amount of money each year for life. The gift annuity contract is issued to you in exchange for your charitable contribution. The amount Mount Holyoke College will agree to pay you depends upon your age at the time of your gift and does not change for the rest of your lifetime. Mount Holyoke College invests and manages your contribution and your payments are backed by the financial resources of Mount Holyoke College. Some or all of the payment you receive each year is taxed as ordinary income.

Qualified Charitable Distribution — A QCD — sometimes called a “charitable rollover” — is a contribution from your IRA directly to Mount Holyoke College. You can make a QCD if you are at least age 70½ at the time of your gift. Unlike other distributions from your retirement accounts, you pay no income tax on a Qualified Charitable Distribution, although there is no charitable deduction for your contribution. However, your QCD contribution counts toward your Required Minimum Distributions (RMD) from your IRA without creating taxable income for you.

Charitable Rollover Gift Annuity — Under a new law effective in 2023, some donors can make a QCD in exchange for a charitable gift annuity. There are some rules and limitations:

  • You can exercise this option only once during your lifetime.
  • There is an aggregate limit of $53,000 for 2024.
  • The entire payment you receive from your charitable gift annuity will be subject to income tax.
  • You can include your spouse as a recipient of the annuity payment.
  • There is no income tax deduction for this contribution, although there is no tax on the QCD either.


Consider Ann, a 75 year old who would like to make a special contribution to support Mount Holyoke College. Ann has substantial assets in her IRA, and she knows that she is facing a RMD this year. Even though she doesn’t really need the income, Ann knows that her RMD is going to increase her income tax. Instead, Ann chooses to make a $53,000 QCD to Mount Holyoke College in exchange for a charitable gift annuity which will pay her $3,710 (7%) per year for the rest of her lifetime. Ann understands that she is allowed to make this election only one time, but she is looking forward to securing a stream of payments for her lifetime while reducing her RMD and making a generous contribution to Mount Holyoke College.

Please contact Dana Gillette at or call 413-538-2637 for more information. We would be happy to work with you and your advisors to help determine whether this new option is right for you.

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