Welcome OLV Investment Group clients. We are honored to have you join the Procyon community.

 

Blog

10 Apr

Posted at 15:15h in Blog by

Although it may not seem obvious, charitable giving plays a vital role in retirement planning, offering retirees a way to support meaningful causes while optimizing their financial strategies. Among the tools available, Qualified Charitable Distributions (QCDs) and donor-advised funds (DAFs) stand out as popular options, often sparking curiosity about how they might work together. Retirees and advisors frequently ask: “Can a QCD go to a donor-advised fund?” This question is more than academic—it touches on tax efficiency, compliance, and the mechanics of philanthropy in retirement.

Understanding the rules surrounding QCDs is the ultimate key to your success. For retirees over 70½, QCDs can serve as a powerful tax strategy, helping reduce taxable income while fulfilling charitable goals.1 However, IRS regulations set strict boundaries on how and where these distributions can be directed.1 Missteps can lead to lost tax benefits or penalties, making clarity important. In this article, we’ll explore what QCDs and DAFs are, address whether they can be combined directly, and outline alternative approaches for retirees seeking to optimize their giving.

What Is a Qualified Charitable Distribution (QCD)?

A Qualified Charitable Distribution (QCD) is a direct transfer of funds from an Individual Retirement Account (IRA) to a qualified charity.1 Unlike typical withdrawals, the funds never pass through the account holder’s hands, they go straight to the charity. To qualify, the IRA owner must be at least 70½ years old at the time of the distribution.1 The IRS caps QCDs at $111,000 per individual per year, adjusted periodically for inflation, and only certain charities, typically public charities as defined in the tax code.1

Tax Advantages of a QCD

QCDs offer distinct tax benefits, especially for retirees subject to Required Minimum Distributions (RMDs). The amount transferred counts toward the RMD, reducing the taxable income reported on the individual’s return.1 For example, if your RMD is $20,000 and you direct $10,000 as a QCD, only $10,000 of the distribution is taxable. This contrasts with taking a full withdrawal and then donating cash, where the entire RMD is taxed upfront, and a charitable deduction must be claimed separately (if itemizing). QCDs simplify the process and can benefit those who don’t itemize deductions, especially under the current standard deduction rules.

Overview of Donor-Advised Funds (DAFs)

A donor-advised fund (DAF) is a charitable giving account sponsored by a public charity, such as a community foundation or financial institution. Donors who contribute assets, cash, stocks, or other property, receive an immediate tax deduction and then recommend grants to charities over time.2 While the sponsoring organization has ultimate control, donors enjoy significant flexibility in directing funds, making DAFs a versatile tool for philanthropy.

Typical Uses and Advantages

DAFs shine in high-income years, allowing donors to make a lump-sum contribution, claim a sizable deduction, and distribute grants gradually. The funds within a DAF can be invested and grow tax-free, potentially increasing the impact of future giving.2 Donors also benefit from streamlined recordkeeping and the ability to support multiple charities from a single account.

Contrast With Other Charitable Vehicles

Compared to private foundations, DAFs require less administrative effort and lower costs, with no need to establish a separate legal entity. Unlike direct gifts to charities, which provide immediate support but no ongoing control, DAFs allow donors to plan their philanthropy strategically over the years.2

The Core Question: Can a QCD Go To a Donor-Advised Fund?

Regulatory Guidance and Restrictions

The IRS imposes clear rules on QCDs: the distribution must go to a qualified charity, defined in the tax code, such as public charities, churches, or educational institutions.1 It’s important to note that donor-advised funds do not qualify.1 IRS guidance, specifically, the Pension Protection Act of 2006 and subsequent clarifications, explicitly excludes DAFs, private foundations, and certain other entities from receiving QCDs.3 As of March 31st, 2026, this restriction remains in place.

Rationale Behind the Restriction

The IRS distinguishes DAFs because donors retain advisory privileges over how funds are distributed, even after the initial contribution.3 For a QCD to qualify, the donation must be an outright gift with no ongoing benefit or control for the donor. A DAF’s structure, where the donor suggests grants, violates this principle, aligning more with personal financial management than direct charity.

Common Misconceptions

Many retirees assume any charitable entity can receive a QCD, given DAFs’ nonprofit affiliation. However, their advisory nature sets them apart. No exceptions currently allow direct QCDs to DAFs, though legislative changes could theoretically alter this in the future.

Alternatives to Making a QCD to a Donor-Advised Fund

Direct Gifts to Qualified Charities

The simplest workaround is to direct QCDs to eligible charities, local food banks, religious organizations, or universities are some of the more common options.1 These gifts satisfy RMD requirements and deliver immediate tax savings, aligning with IRS rules.1

Combining DAF Giving With Other Strategies:

Retirees can still integrate DAFs into their plans indirectly:

1. Complete a QCD: Send the distribution to a qualified charity.1

2. Take additional distributions: Withdraw extra funds from the IRA, if needed, beyond the QCD amount (taxable as income).1

3. Contribute to DAF: Use after-tax dollars from the withdrawal or other sources to fund a DAF, claiming a deduction if itemizing.2

This approach sacrifices the QCD’s direct tax exclusion for the DAF contribution but preserves flexibility in grant-making.

Using Other Accounts for DAF Contributions

Instead of IRA funds, retirees can fund DAFs with appreciated securities, cash, or other assets. Donating stock, for instance, avoids capital gains tax and may yield a deduction,4 offering a tax-efficient alternative to cash contributions. This supports long-term philanthropy without relying on QCDs.

Strategic Considerations for Retirees and Advisors

When a QCD Makes Sense: QCDs excel when RMDs push retirees into higher tax brackets or when they don’t itemize deductions.1 If charitable goals align with eligible organizations, a QCD optimizes tax savings while meeting IRS requirements.

When a DAF Makes Sense: DAFs suit retirees wanting centralized giving, anonymity, or a multi-year plan. They’re ideal for legacy planning or managing large donations in peak earning years, offering growth potential and administrative ease.

Blending Approaches

Consider a retiree with a $30,000 RMD and $50,000 in annual giving goals. They could direct $20,000 as a QCD to a local charity, reducing taxable income,1 then contribute $30,000 in appreciated stock to a DAF for future grants.4 This balances immediate tax relief with long-term flexibility.

Consulting with a Financial Advisor

Navigating QCDs, DAFs, and tax rules requires advice tailored to your specific needs and retirement plan. A professional can assess your personal RMD obligations, legacy plan, and charitable intent to craft an optimal strategy tailored to your needs.

If you are exploring how these options might fit into your own financial plan, consider speaking with one of our seasoned professionals. The Procyon team would be honored to work with you to create a plan that fits your financial and retirement needs. Schedule a meeting with me or visit us online at www.procyon.net

We Can Help You Further

Under current IRS rules, QCDs cannot go directly to donor-advised funds due to the donor’s retained advisory role.3 However, retirees can pair QCDs to qualified charities with separate DAF contributions, leveraging both tools effectively.

Charitable giving in retirement can be a powerful way to leave a legacy and manage taxes, but precision matters. By using QCDs and DAFs correctly, you can amplify your impact. For personalized guidance, schedule a free consultation with our team to align these strategies with your unique goals.

Investment advisory services are provided through Procyon Advisors, LLC, a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”). Procyon Advisors, LLC does not provide tax or legal advice.

April, 2026

 

Sources:
1. “What is a Qualified Charitable Distribution?” https://www.fidelitycharitable.org/guidance/philanthropy/qualified-charitable-distribution.html. Accessed April, 2026
2. “What is a Donor-Advised Fund?” https://www.fidelitycharitable.org/guidance/philanthropy/what-is-a-donor-advised-fund.html. Accessed April, 2026
3. Pension Protection Act of 2006 (Public Law 109-280). https://www.congress.gov/bill/109th-congress/house-bill/4. Accessed April, 2026.
4. “Next Level Giving.” https://www.ml.com/articles/donating-appreciated-stock-to-charity.html. Accessed April, 2026

15 Dec

Posted at 15:36h in Blog by

There’s increasing interest in employing annuities in retirement plans, but plan sponsors need to review the products carefully.

A 401(k) retirement-savings plan doesn’t guarantee the availability of funding through the entire life of the account owner. Outcomes depend mainly on:

  • The amount of funding available.
  • The longevity of the account owner.
  • Market conditions and investment performance.

There’s another factor in the shape of an annuity designed to provide a fixed stream of income for life. But the strength of the stock market through most of the past 40 years, subdued price inflation until very recently, a general sense that annuities were overpriced and regulatory hesitation have conspired to put that solution on ice. That is, until recently — and we’ll get to that vital point in a moment.

SO MANY QUESTIONS

Savers understand that the value of assets can drop, and stay down for decades. It took the S&P
500 about 25 years to recover from the Crash of 1929. Another trough marred absolute performance from the early 1970s through the mid-1990s, despite a surge in relative performance that began in 1982. Indeed, the setbacks the stock market has encountered since then — the crash of ‘87, the dot-com downturn, and the Great Recession of ‘08 — now look less like hard stops than temporary setbacks. But uncertainty always hurts, especially when, as now, stocks are down, and bond yields flirt with historic lows despite the recent (and unsettling) emergence of general price inflation.

Between feeling one’s finances aren’t ready for retirement and taking remedial action before it’s too late stand a clutch of unanswerable queries:

  • When will the stock market bounce back?
  • When will inflation stop eroding value?
  • Are we heading into a global recession?
  • Even if we bounce off a downturn once again, will we have to endure slow growth for years to come?

The pain these questions conjure for retirement savers comes less from each in isolation than from their aggregate impact on savers’ ability to make plans. Plainly, it’s hard to set personal finance goals when the value of money is softening, bond yields are in question and stocks look tired. And there are no easy answers, no quick fixes. Modern portfolio theory suggests ditching stocks for cash can do more harm than good. By the same token, eliminating bonds altogether could deprive savers of a cushion with a low historic correlation to stocks.

REENTER ANNUITIES

No wonder 81% of retirement plan participants surveyed by the Retirement Income Institute late in 2021 were interested in a guaranteed income option for their retirement plans. Boiled down, they want a portion of their income savings to behave like their grandparents’ defined-benefit plans by providing a fixed monthly stipend as a basis for budgeting, longer-term retirement needs and legacy planning.

“Workers value knowing how much they can safely spend more than any other characteristic of a retirement savings plan,” according to the report. At the same time, retirement savers aren’t keen to go all-in on annuities. In aggregate, the Retirement Income Institute says plan members given a choice to allocate savings among stocks, bonds, and an income annuity would place 33.5% of their total savings in an income annuity — a proportion that skews a bit higher for older and lower-income plan participants. In plain terms, most retirement plan owners want growth from stocks that’s balanced by bonds and augmented by an income stream they can count on.

Fortunately, the SECURE Act of 2019 makes it easier to add annuity options to tax-deferred retirement plans. Pre-SECURE Act products that facilitate sustainable withdrawals have been around for ages, but it takes an insurance-linked annuity to guarantee such an outcome — and new provisions in the legislation have afforded safe harbor protections for plan sponsors that want to incorporate annuity options into their tax-deferred retirement plans.

DON’T TRY THIS AT HOME

While the product pipeline for SECURE Act-friendly annuities is a work in progress, insurers and asset managers are competing to get their wares to market. As always, the results are and will continue to be mixed. Maybe more to the point, no one product is ever suited to every circumstance.

As a firm that specializes in advising employers that sponsor qualified and nonqualified retirement plans, we recommend carefully reviewing retirement products. For annuities in particular, one should seek to:

  • Align your risk tolerance with that of the investment product.
  • Determine what kind of annuity — immediate or deferred — is called for.
  • Ascertain expected returns and compare them to annual fees.
  • Check and communicate the underlying insurance policy details.

Finally, seek a firm that has a role as a fiduciary since that means their conclusions are unbiased as they search for retirement plan products and configurations best suited to the needs of individual investors. In this way, employees feel more secure about their post-career lives, and plan sponsors have new incentives for attracting and retaining employees.

Amber Kendrick is vice president and retirement plan consultant with Shelton, Connecticutbased Procyon, which specializes in advising employers that sponsor qualified and nonqualified retirement plans.
Download PDF

20 Jan

Posted at 20:51h in Blog by

Women Owning their Wealth (WOW) Collaborative kicks off its 2021 series of Financial Wellness seminars during Women’s History Month and in celebration of International Women’s Day with this webinar!

 Amber Kendrick CPFA, CRPS®, Caroline Wetzel CFP®, CDFA®, AWMA® and Karen Drancik offer a panel discussion focused on

  • The real costs of being silent when it comes to talking about money
  • Financial topics you need to talk about with the people you love the most
  • Tips for helping to make money talk less taboo and more natural

Watch the replay below!

(more…)

29 Dec

Posted at 20:53h in Blog by

Many financial advisors are missing the mark with ultra-wealthy investors by not considering how tangible assets – such as art, real estate and other valuables – factor into their overall portfolios, a new report suggests.

Eighty-seven percent of ultra-high-net-worth investors consider these tangible assets as part of their overall balance sheets, while only 53% of advisors take such assets into consideration, according to a new report by insurer Chubb and The Wharton School of the University of Pennsylvania.

The report, based on a survey of 100 ultra-high-net-worth investors with $30 million or more in assets, as well as family offices and “key financial decision makers,” found that while many wealth managers emphasize investments in stocks, bonds and private equity, ultra-wealthy clients want physical holdings, such as artwork, boats, collectibles, planes, real estate and businesses, included in investment plans.

“Most UHNW respondents view their wealth holistically, meaning that they think of multiple factors, such as tangible non-financial assets, operating businesses assets, human capital and liquid financial assets, as representing a more complete picture of their family’s total wealth,” Chris Geczy, the Wharton finance faculty member who oversaw the research, said in a statement.

“Not all advisors are capable of looking at the types of assets that clients look at,” said Antonio Rodrigues, a partner and senior portfolio manager at Florida-based Procyon, which manages $5 billion in client assets. “Even a lot of the ones that say they’re looking at it, they’re not really looking at it. They’re just accounting for it in some fashion. Most advisors are simply selling an investment product that’s highly liquid, and perhaps not looking at the whole picture.”

Ultra-high-net-worth investors are more likely to “treat tangible assets as investment and risk management assets” as they become wealthier, according to the report.

Whereas many advisors are focused on investments that will generate returns, ultra-high-net-worth investors tend to have an emotional connection to physical assets such as artwork, but also turn to those holdings as a way to hedge against market risks, said John Prince, CEO of Respada, a platform for family offices and ultra-high-net-worth investors focused on private equity, real estate and philanthropy.

“Wealth managers get paid based on performance, and technically tangible assets don’t have that level of attention,” he said. “When you need a way to hedge against inflation, there may be a way to do some level of asset protection. If you have some real estate, and if it is held correctly through the right asset protection strategies, they clearly provide you a good amount of protection. But having said that, it’s also implied that when you do that type of hedging, you are not expecting any performance or any returns for those assets.”

To appeal to ultra-wealthy clients, advisors should have a value proposition that goes beyond investment products to take a “multidimensional” approach to portfolios, the report argues.

Ultra-high-net-worth investors’ balance sheets are more complex, the report noted. In addition to investment advisory or brokerage accounts, clients also have loans and other capital structures around homes, land, art, vehicles, boats, and physical commodities. Additionally, balance sheets may include risk management around financial hedges and life, property and casualty insurance. They might also include public or private investments and liquidity ranging from assets “that can be quickly turned into cash to those that may be illiquid for some time.”

Failing to consider an ultra-high-net-worth investors’ total assets and liabilities could make it difficult to apply best governance practices or create an effective financial plan, according to the report.

“It’s important to include [tangible assets] in the reporting structures, for sure, for good governance,” said Prince. “Especially if you have a large generational family, you’d want to report it to all beneficiaries and stakeholders at the family office.”

Tangible assets may offer some diversification, according to the findings, but they have unique risks and market exposures. After all, a home can burn down, and artwork could be destroyed.

While more than half of survey participants said they actively coordinate risk-management of tangible assets in total balance sheets, there are “dangerous” gaps between investors and advisors, especially those with different roles.

For example, 81% of ultra-high-net-worth investors with $30 million or more consider tangible assets to be wealth-management assets compared to 57% of less wealthy investors. And, only 76.5% of advisors working with wealthy clients considered tangible assets in the same way.

Such gaps could present opportunities for advisors to expand their offerings to include risk-management for assets outside of traditional investment portfolios, the report found.

While regulatory restrictions or policies at advisory firms might prohibit taking a “total balance sheet approach to clients for wealth and risk management,” family office-style services are becoming more “democratized” in order to meet the demands of clients, the report noted.

The decision to include tangible assets in a portfolio comes down to the capabilities of a wealth manager and whether they are incentivized, Prince said.

“It goes back to the performance and fee structure,” he said. “There are platforms where they charge a fee for including tangible assets into the reporting structure. I think it’s important to do that. It’s also important to look at asset protection holistically. If you follow good practices, having tangible assets is a good thing.”

Many of the gaps also have to do with technology constraints around accounting for such assets, according to Rodrigues, who added that Procyon factors in all client assets and investments.

“It’s usually not something that could be held at Schwab, Fidelityor TD – it’s going to be something that is held off a balance sheet or off of a custodian,” he said. “If you’re trying to account for this, how do you get that data into your reporting system? And that’s only if you have a reporting system. There are some moving pieces technologically that need to occur.”

Many clients also view tangible assets as a tax and accounting issue, creating yet another gap for an advisors.

“That disparity should likely decrease over time, in the sense that advisors are becoming more holistic,” Rodrigues said.

29 Sep

Posted at 12:45h in Blog by

Antonio Rodrigues, Jeff Farrar and Michael Desmond of Procyon’s investment committee join Joe Burns from iCapital’s research team to take a deeper look into some of the “alternative asset” classes that can be owned as a compliment to an existing diversified core strategy. We will talk about how the marketplace has evolved and share some details of the extensive due diligence process required for these types of investments.

Watch by clicking below!

13 Jul

Posted at 12:48h in Blog by

The Procyon Investment Committee takes a fresh look at the traditional 60/40 balanced portfolio through the prism of the post-pandemic economy. Balanced portfolios are the bedrock of private wealth and institutional investors alike, and while that may never change Procyon takes a look deeper to discuss how balanced portfolios may evolve in the future Featured speakers:

  • Antonio Rodrigues, Partner & Senior Portfolio Manager
  • Michael Kelly, Partner & Private Wealth Advisor
  • Kevin Catale, MBA, Financial Analyst

Watch by clicking below!

13 Jul

Posted at 12:48h in Blog by

The Procyon Investment Committee takes a fresh look at the traditional 60/40 balanced portfolio through the prism of the post-pandemic economy. Balanced portfolios are the bedrock of private wealth and institutional investors alike, and while that may never change Procyon takes a look deeper to discuss how balanced portfolios may evolve in the future Featured speakers:

  • Antonio Rodrigues, Partner & Senior Portfolio Manager
  • Michael Kelly, Partner & Private Wealth Advisor
  • Kevin Catale, MBA, Financial Analyst

Watch by clicking below!

31 Mar

Posted at 12:40h in Blog by

On Wednesday, March 31, 2021, Antonio Rodrigues, Partner & Senior Portfolio Manager of Procyon, hosted the online event focusing on investing and economic trends accelerated by the COVID-19 pandemic.

Joining Antonio was Mark Rich, CFP®, and Senior Financial Analyst, and Chief Investment Officer of Dynasty Financial Partners, Joe Dursi.

Watch by clicking below!

15 Mar

Posted at 20:19h in Blog by

Women Owning their Wealth (WOW) Collaborative kicks off its 2021 series of Financial Wellness seminars during Women’s History Month and in celebration of International Women’s Day with this webinar!

 Amber Kendrick CPFA, CRPS®, Caroline Wetzel CFP®, CDFA®, AWMA® and Karen Drancik offer a panel discussion focused on

  • The real costs of being silent when it comes to talking about money
  • Financial topics you need to talk about with the people you love the most
  • Tips for helping to make money talk less taboo and more natural

Watch the replay below!

(more…)

18 Dec

Posted at 17:50h in Blog by

Please watch leaders from Procyon’s Investment Committee in an intimate conversation with industry expert Mark Peterson of Blackrock. They will discuss how this year’s activities have influenced investor emotions and behaviors, along with strategies for navigating emotional bias in times of prolonged uncertainty and change. Procyon Partner and Chair of Procyon’s Investment Committee, Antonio Rodrigues, will moderate the conversation with Mark and Procyon colleague Private Wealth Advisor Caroline Wetzel CFP®, CDFA®, AWMA®.

(more…)