Beyond a Dollar: Stock Donations for Increased Impact

  • Wealth Planning

Beyond a Dollar: Stock Donations for Increased Impact

In Summary

While it remains the case that the majority of charitable giving is made in the form of cash, donors may wish to consider making gifts to charity of appreciated securities instead.  Many times, the potential tax benefits of doing so can outweigh the ease of a cash contribution and create opportunity for greater philanthropic impact.

Major Takeaways

  • Use highly appreciated stock – consult with your investment advisor who will be helpful in identifying attractive securities to donate.
  • If giving directly to a charity, notify the charity of your intended donation and confirm they are willing to accept the asset.
  • Consider using a Donor Advised Fund (“DAF”).  A DAF is a giving account sponsored by a public charity.  When a donor makes a gift to a DAF account, the donor is entitled to an income tax deduction in the year of contribution subject to the same AGI limitations as those for public charities.  Assets contributed to a DAF are permitted to remain in the account and earn returns tax-free, and the donor may recommend grants from the DAF to various public charities over time.  Choosing a DAF provides a streamlined way to contribute stock and qualify for a charitable deduction immediately, while delaying the decision as to which charities to support to a future date.
  • Keep a record of your gift for tax purposes, including any communication received from the charity or DAF sponsor.