While cash gifts are one of the most common forms of giving, many donors at San Diego Foundation are contributing gifts of appreciated stock because of the added tax advantages that come with giving these non-cash assets.
The federal tax code provides incentives for making charitable gifts of appreciated securities, including public stock. This means that when you donate stock, you can make a larger philanthropic impact and enjoy greater tax advantages than simply donating cash or selling the stock and donating the proceeds.
Whether you have a few shares to give or a significant sum, when you contribute stock to a new or existing donor-advised fund at San Diego Foundation, you can:
- Claim a charitable deduction equal to the fair market value of the public stock
- Avoid capital gain income on the appreciated value of the stock, which allows you to grant more to issues and causes you care about
- Claim a charitable deduction of up to 30% of your adjusted gross income for the year
Gifting Stock at SDF
Wealth advisor Mark Petrie of Aspiriant, one of the nation’s leading independent wealth management firms, has been helping successful San Diegans achieve their long-term financial goals for years. One of his clients is David Engel, a donor-advised fund (DAF) holder at San Diego Foundation.
While going through their annual strategic planning and review, Mark and David identified a few publicly-listed stocks with significant unrealized gains held in David’s Family Trust.
Mark recommended donating those assets to his DAF at San Diego Foundation. That way, instead of selling appreciated shares and owing large sums in capital gains tax, the entire value of his investment return could be utilized for charitable giving and tax deductions.
Once Mark and David agreed on which assets to gift and how much, they worked with SDF staff to complete the process.
The Donor Services Team provided David with instructions on how to transfer the assets, beginning with submitting this online form. David’s gift letter included an estimated range of the fair market value of the donated stocks. That letter was then used by Mark to calculate the tax deduction David would receive through the transaction. Because the final sale of the stock from SDF’s brokerage account can occur a few hours or days after Mark and David execute the transfer, the estimated range of the fair market value ensures the best price for the donor at the time of the decision.
When SDF received the transferred stock in its brokerage account, our broker found the best price and sold it. The amount that the broker sold the stock for was transferred into David’s DAF, and he immediately had a new pool of money to grant to nonprofit organizations strengthening our community.
Simplifying the Process
For many, gifting a non-cash asset like public stock can be overwhelming. Our expert team has decades of experience working with professional advisors and philanthropists to identify the best giving strategy, whether it’s for cash, stock or other assets.
If you are considering a gift of appreciated stock, we can connect with you and your wealth advisor to help you accomplish your philanthropic goals.
