More Donors See Benefits of Giving Securities Over Cash

November 07, 2007

More Donors See Benefits of Giving Securities Over Cash

More donors are choosing to give charitable gifts in the form of securities — such as stock, mutual funds, and other investments — instead of cash, reports The Wall Street Journal. The current strong stock market as well as benefits of efficiency and tax savings for the donor and the recipient charity seem to be driving this trend, the newspaper says.

Gerry Golub, a former managing partner of an accounting firm who plans to make thousands of dollars worth of charitable donations in the form of appreciated stock this year, explains: “It’s an opportunity for people who have done well in the stock market to count their blessings” and “help them give back” to worthy causes.

Giving a gift of appreciated stock with unrealized long-terms gains allows a donor to claim a deduction against his or her federal income taxes for the current market value of the shares. Neither the donor nor the charity owes capital-gains taxes on the profit from the shares. According to a recent analysis by Fidelity Investments, 10 million to 20 million American households could potentially save between $2.2-billion and $4.5-billion a year in taxes by donating appreciated securities, instead of giving cash directly to charities.

Kim Wright-Violich, president of Schwab Charitable Fund, a donor-advised fund, says that gifts of appreciated securities are up 76 percent, to $350-million in the first 10 months of this year, compared with a year earlier. The Vanguard Charitable Endowment Program says appreciated securities represent 69 percent of all donations so far this year, up from 46 percent last year.

Comments

An interesting story in light of the 11/1/07 story about the survey done by Fidelity Investments and the Fidelity Charitable Gift Fund. The story on this site was headlined: Most Stockholders Don’t Understand Tax Breaks for Donating Securities, Study Finds.” While the stories are NOT necessarily contradictory, they do present interesting ing “counter” perspectives.

— Philanthro Joe Nov 7, 01:38 PM #

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