Gifts of Stock
Posted October 1st, 2014

Encouraging Stock Gifts


With stock market indexes at record highs, donors may be ready to consider “giving out of the market.”

An up market

What a difference five years can make. In late August, the S&P 500 index reached the 2,000 mark, nearly three times the low seen in March of 2009. In 2014 alone, the S&P has risen almost 10 percent to a value of $23.9 trillion in late August.

The Dow Jones Industrial average has experienced a similar growth rate. Since its low of 6,547 on March 9, 2009, the Dow has grown to its current value of over 17,000, also nearly three times its 2009 low point. From January 2 to present, the Dow has risen roughly 4 percent and is consistently trading above the 17,000 level.

Remind them what they’re missing.

Many of your top donors and prospective donors own stock that has appreciated significantly in the past several years. While they may be knowledgeable about buying and selling securities, they may need to be reminded that they can use these assets to fulfill campaign pledges, fund planned gifts and make year-end or other outright gifts. Even the savviest donors have been known to sell stock in order to write a check to their favorite charity.

Screen Shot 2014-09-30 at 9.53.49 AMWhen a donor sells stock and then gives the proceeds to charity, he or she is able to take an immediate tax deduction for the value of the gift but is still liable for capital gains taxes. By making a gift in this way, the donor is incurring a cost he or she doesn’t have to.

Instead, your donors could make a gift of the appreciated stock. By giving the securities directly to charity, the donor is able to take a tax deduction for the full value of the stock but is not liable for tax on the capital gain being given to the charity. These savings can be substantial indeed in a booming market.

Once donors understand the tax savings they can enjoy by giving stock instead of cash, they may be interested in making a larger gift than they had previously planned. Donors need to be reminded of these benefits before they make a gift. Since many revisit their charitable giving near the end of the year, now is the time to set plans in motion to help your donors maximize their giving potential.

Sharpe Group has several publications designed to highlight the benefits of giving securities. Visit, email or call 901.680.5300 to learn more.

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The publisher of Sharpe Insights is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Sharpe Insights may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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