The ability to use an IRA for charitable giving is the result of several recent rule changes. Originally introduced in 2006, it was a political volleyball until gifting IRA's was ratified as a permanent feature of the tax code in 2012. Being relatively new, it's still rarely used in tax strategy, but deserves more attention and better understanding. With the brief description that follows, hopefully you can properly strategize about how this tool could be helpful to maximize your giving, or that of an older family member, since only septuagenarians and older have access to this tool.
IRA's make for potentially powerful gifting accounts and that's the reason the IRS limits donations to 100k per year. These donations are not deductible because the IRA was likely fully pre-tax anyway. IRA gifts are also limited to donors over age 70½, so surely these donors are facing a taxable required minimum distribution (RMD) anyway. The avoidance of that certain tax can be more powerful than getting a deduction because those too are limited, but in different ways.
Because the IRA donation limit of 100k is not tested against adjusted gross income (AGI) the way other donations are, this could make an IRA a more powerful giving tool. This is especially true for those infrequent but large donations normally associated with say a capital campaign at a church or synagogue. This is because normal gifts of cash contributions can't be deducted in a single year if they exceed 60% of adjusted Gross Income (AGI). An even lower limit of 30% applies if you're using low basis stock or are routing your giving through a private foundation or donor advised fund. You can burn off any excess over the 30% over five forward tax years, but you must survive to benefit, and future value is diminished in numerous other ways. The fact that IRA donations don't have this test, is often what makes these gifts so powerful. There's also carry-on effect of donating from an IRA that might also lower Medicare part B costs by avoiding the high-income surcharge and could also increase the tax-free portion of Social Security benefits.
As an example of how this could play out, let's assume we have Irma Investor with a $1mil IRA and she's 72. She has annual dividend income from her other stocks of $100k, and many of her stocks are near zero cost. Irma's church has a multi-million-dollar capital campaign for a new sanctuary and Irma is considering a $100k gift. Irma's RMD is $39k since her life factor is 25.6 on the IRS website. Since dividends are capped at a lower tax rate than ordinary income like IRA RMD's, deducting gifts against her sources of income limits the value of those deductions to the max bracket on that type of income: 23.8% on dividends. That's why gifting from an IRA is often powerful because it avoids the higher ordinary income tax on an RMD. Another benefit is that gifting the IRA pre-RMD could lower the tax bracket on other income by shifting overall income lower. Gifting stock might also take Irma four tax years to fully absorb the deductions, due to the 30% AGI annual deduction limit when gifting stock. This would also open Irma's family up to risks that Irma lived four more years, since a sudden change of health could jeopardize those unused future deductions. But with $80k in RMD's likely due over the next two tax years, Irma could make a $50k IRA gift today, and another $50k in January. These would satisfy her RMD's for both years and avoid the possibly much higher tax on ordinary income of nearly 38%. Using the IRA in this way would likely prove to be $10k more valuable to Irma with the same gift to the church, when compared to making a gift of stock. It might be $20k more valuable to Irma's heirs if she suddenly died one year from now and only amortized 60% of her stock gift, compared to 100% of her IRA gift. Again, avoiding the certainty of current taxes on an RMD is often more valuable than dealing with the limits on cash or stocks gifts when having to use multiple tax years due to caps on deductibility and the higher tax bracket on RMD's.
Gifts of IRA's cannot be routed through a donor advised fund or a private foundation, so infrequent and large contributions often make the most sense. Everybody's situation is different, so coordinating this with counsel from a tax professional is a must.