How Do You “Capitalize” When Stocks Surge? | Sharpe Group
Posted June 5th, 2024

How Do You “Capitalize” When Stocks Surge?

In the last few years, Americans’ household wealth has continued to grow, reaching record highs driven primarily by increases in the value of corporate stock. According to Federal Reserve reports, the majority of American families have stock holdings directly or indirectly in individual stock shares or other arrangements like IRAs, 401(k)s and 403(b)s.

Between 2010 and 2017, charitable gifts of stock rose to record levels before taking a bit of a breather. Then, between tax years 2020 and 2021, stock gifts experienced explosive growth, accounting for almost two-thirds of all noncash contributions, rising from a reported $51 billion to $74.1 billion, an increase of about 45%.*

Chances are, many of your donors own some of these valuable assets, so it’s important to demonstrate smart ways they can use them to make charitable gifts now and in the future. A few ideas include:

  • Outright gifts of publicly traded stock, which offer potential income tax deductions and capital gains tax savings.
  • Gifts via a donor advised fund or family foundation, which offer potential income tax deductions now, avoidance of capital gain taxes, locked-in value and a source of gifts over time (e.g., pledge payments).
  • IRA QCD gifts, which are tax-free gifts outright up to allowable annual limits or through a special one-time election to fund a charitable gift annuity or charitable remainder trust to produce an income stream.
  • Charitable gifts of retirement plan remainders to avoid IRD (income in respect of a decedent) issues and possible state or federal estate taxes.

With the right data and the use of a multi-channel approach (targeted brochures and booklets, gift planning print and electronic newsletters, in-person communications, donor stories, etc.), you can remind your donors of the many ways appreciated stocks can provide benefits when making charitable gifts.

Barlow T. Mann, JD, Sharpe Group general counselBarlow T. Mann, JD, is general counsel. You can connect with Barlow via LinkedIn or at

*According to IRS figures from individual tax returns.

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