Giving before the sale: The power of giving stocks compared to writing checks

by NCF staff  |  October 10, 2012  |  Type: Strategies

With all the emphasis on stretching a dollar these days, have you thought about how to make your giving dollars go further this year-end giving season? If you’re getting ready to write checks to charities or make cash contributions to your NCF Giving Fund, you may want to re-think your strategy. 

By gifting appreciated stocks or mutual funds instead, you could tap into an incredible opportunity to pay less tax, give more, improve your personal cash flow, and simplify the process of supporting your favorite ministries. 

The key lies in the capital gains tax savings that come with asset-based giving. For example, let’s say you sold $10,000 worth of stock and gave the proceeds to multiple charities (see the pie chart to the left). You’d first pay capital gains on the appreciated stock. You’d also have to keep track of every tax receipt manually. 

Or, as the pie chart to the right illustrates, you could give $10,000 worth of stock to your Giving Fund. The shares you donated would be sold by NCF tax-free, and the proceeds would be placed in your Fund. This means more money available for giving. 

This gift would also qualify for a $10,000 charitable deduction. And if you still like the stock, you can re-fund your portfolio using the $10,000 cash you would have given to reset your cost basis. And with your tax savings, you could give even more. 

The benefits of giving stocks or mutual funds instead of writing checks are huge:

  • More giving capacity
  • A reset cost basis 
  • Tax-free portfolio rebalancing 
  • Improved personal cash flow

>> Download a form for stock and mutual fund transfers

>> Download a form for stock certificates and transfer agent stock assignments

Multiply your impact
Often using what's in your hand instead of what's in your wallet can make a huge difference when it comes to giving. Learn how one family was able to give almost a half a million more to charity by gifting land instead of ... read more
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