Total charitable impact


Boost disaster relief with your RMD

November 15, 2017


As donors consider year-end giving, Vanguard Charitable receives a number of requests to accept individual retirement account (IRA) distributions. While federal law stipulates that donor-advised funds cannot accept these distributions tax-free, Vanguard Charitable does provide an alternative for donors who are interested in supporting disaster relief through this mandatory withdrawal.


Individuals over the age of 70 ½ are obligated on a yearly basis to take the required minimum distribution (RMD) from their IRA and pay taxes on the distribution as ordinary income, or otherwise face a severe penalty. They can avoid these taxes, however, by issuing up to $100,000 of this distribution directly to a qualified public charity. This option is known as a qualified charitable distribution (QCD). (For more information, see our recent Q&A on RMDs and QCDs.)


To meet donors’ requests for a fund they could donate their QCDs to, Vanguard Charitable created a non-donor-advised fund, the Sustainable Disaster-Relief Fund (SDRF). The SDRF is a field-of-interest fund that is designed to support a specific cause or purpose—in this case, the critical needs that arise after natural and man-made disasters that are not addressed by immediate relief efforts.


Helping people and places beyond the initial relief efforts

Since the SDRF was created in 2006, it has issued grants to a wide range of disaster relief organizations and recovery efforts around the globe, with a focus on providing long-term, high-impact support to affected people and places.

While immediate support is crucial, other elements of disaster relief—such as intermediate and long-term support, as well as disaster preparedness — tend to be overlooked even though they are vital in helping a community truly rebuild and prepare for future disasters.


The SDRF prioritizes sustainable community rebuilding efforts, especially those that pick up where immediate relief work leaves off. Typically, in the immediate aftermath of disasters—such as recent hurricanes Harvey, Irma, and Maria, earthquakes in Mexico, and wildfires in California—the support for affected communities spikes and then dwindles over time as national attention moves elsewhere.


“With communities across the US and around the globe fighting to regain their way of life after disasters, the SDRF and its focus on long-term recovery are more relevant than ever,” said Vanguard Charitable Chief Strategic Planning Officer Rebecca Moffett. “A strategic approach can maximize the impact of donations and revitalize affected populations.”


The SDRF targets the three latter phases of disaster recovery: Intermediate, long-term, and preparedness. While immediate support is crucial, the other three phases tend to be overlooked but are vital in helping a community truly rebuild and prepare for future disasters. Today, as communities from Puerto Rico to the Napa Valley regain their footing, Vanguard Charitable continues to assess the situation, with the SDRF poised to provide financial assistance to those with the greatest need.



The granting history of the Sustainable Disaster-Relief Fund

Overseen by Vanguard Charitable’s board of trustees, the fund grants a minimum distribution of 5% of its balance on an annual basis. This policy reflects Vanguard Charitable’s commitment to taking action when necessary while sustaining account growth so that the SDRF can respond to future disasters as well.


Over the years, the SDRF has granted to CARE, United Way, Save the Children, American Red Cross, and AmeriCares for relief efforts for disasters and epidemics including the earthquake in Haiti, Hurricane Sandy in the Northeast, tornadoes in the Midwest, and the Zika virus.


In 2017, with an influx of new contributions, the SDRF has supported a greater number of organizations, including Together Rising for its work with unaccompanied refugee children from Syria; Doctors Without Borders for its medical centers in crisis areas of Yemen; the United Way of Genesee County for its aid to the people of Flint, Michigan, affected by lead in the water; and The Humane Society of the US for its support of animal shelters in US disaster zones.