The Setting Every Community Up for Retirement Enhancement Act — the SECURE Act — was signed in late December as part of an end-of-year appropriations package. It was the first significant retirement-savings legislation since the Pension Protection Act of 2006 and made several changes whose effects would propagate slowly into the charitable sector.
The required minimum distribution age moved
The most-discussed provision raised the age at which holders of traditional IRAs and most workplace retirement accounts must begin taking required minimum distributions, from 70½ to 72. The change was framed as a response to longer working lives and longer life expectancies. For donors who used qualified charitable distributions — transfers directly from an IRA to a 501(c)(3) public charity, which count toward the required minimum distribution but are not included in taxable income — the change introduced a new asymmetry.
Qualified charitable distributions remained available beginning at age 70½, even though required distributions no longer began until 72. The eighteen-month gap created a planning opportunity: a donor who had reached the QCD-eligibility age but not yet hit the required-distribution age could still make qualified transfers, taking the income exclusion benefit before any required distribution made it more straightforward.
The end of the stretch IRA changed estate planning
The SECURE Act also eliminated the so-called "stretch" IRA for most non-spouse beneficiaries, requiring them to fully distribute inherited retirement accounts within ten years rather than over their own life expectancies. The estate-planning consequences for wealthy families were significant and were extensively covered. The charitable consequence, less visible in mainstream coverage, was a renewed interest in naming charitable remainder trusts or 501(c)(3) public charities as IRA beneficiaries.
For a donor with substantial retirement assets and charitable intent, the new ten-year rule made non-charitable beneficiary designation considerably less tax-efficient than it had been. Naming a charity as the IRA beneficiary — either directly or through a charitable remainder trust that paid an income stream to family members for a term of years — became, for the right donor profile, the dominant strategy.
Operational implications for development offices
Planned giving offices at large institutions reported a noticeable increase in IRA-beneficiary inquiries through 2020 and 2021 as donors and their advisors absorbed the implications of the law. The training cycle for major-gifts officers expanded to include IRA charitable rollover and beneficiary-designation conversations as a standard part of donor stewardship.
For mid-sized organizations without dedicated planned giving staff, the SECURE Act’s changes were largely invisible. Many of these organizations missed the opportunity to invite IRA-based gifts from donors whose changed circumstances made them newly receptive. The capacity gap between large institutions with sophisticated planned giving programs and smaller organizations widened — a quiet but consequential outcome of the year’s legislative changes.
Subsequent adjustment
SECURE 2.0, enacted three years later, would raise the required-distribution age further (to 73 in 2023, scheduled to reach 75 in 2033), index the QCD limit for inflation, and create a new one-time election to fund a charitable remainder trust through a QCD. Each of these changes would extend the planning horizon for older donors with charitable intent. The cumulative effect, by the mid-2020s, was that the IRA-charitable-distribution conversation had become one of the most active in major-gift fundraising.