Charities Face Delays and Hurdles in Collecting Deceased Donors' IRA Gifts from Financial Firms
Nonprofit organizations and legal experts are reporting significant difficulties and delays in collecting inherited IRA funds designated by deceased donors. Many financial institutions, including major brokerage firms like Fidelity and Schwab, are allegedly requiring charities to open new accounts and provide extensive, sometimes sensitive, personal information of their employees or board members, such as Social Security numbers or home addresses, before releasing the funds. This process can prolong the collection of gifts for months or even years, diverting scarce staff resources and, in some instances, leading charities to forgo the donations entirely. While financial firms often cite anti-money laundering and customer identification rules, lawyers argue that these requirements are not always legally mandated for charities receiving inherited IRA funds. The issue is becoming more prevalent as a large transfer of wealth is anticipated, with an estimated $18 trillion expected to be donated to charities by ...
