News for Professional Advisors

Case Study: Benefits of Donating Appreciated Stock

As the cliché says, the one thing certain in life is change — and if there’s one place that’s undoubtedly true, it’s the stock market. Looking back to summer 2022, markets were down, inflation was up, and nationwide, charitable giving was on the decline. Fast forward to summer 2023, markets were up, inflation was half of what it was the prior year, and we saw signs that giving was beginning to rebound.

As the seasons change again, we continue to see signs of market volatility.

Amid all the change of the last several years, we know this: Whether markets are up or down, some stocks still out-perform.

We recently worked with an advisor whose clients were in this situation. The gains had created concentrated stock positions and, as a result, their portfolio allocations had become imbalanced under their existing investment strategy. His clients were already supporting local charities, so we worked with the advisor and his clients to establish a Donor Advised Fund at the Community Foundation. The clients donated the appreciated stock into the Donor Advised Fund, advancing their charitable goals, receiving a charitable income tax deduction, and avoiding taxes on capital gains.

By donating stock to a Donor Advised Fund, your clients can:

  • Enjoy the ease and convenience of the Donor Advised Fund as an account for current and future charitable giving.
  • Maintain a mix of investment assets in the Donor Advised Fund account that are consistent with the client’s investment philosophies.
  • Benefit from an up-front income tax deduction, avoid capital gains on the assets’ sale within the fund, and grow the proceeds for future grantmaking.
  • Enjoy supporting charities in the client’s name, the fund’s name, or anonymously.
  • Receive a single year-end tax document that summarizes all gifts for tax purposes.

Want to learn more about how to help your clients maximize their charitable giving? We’re here to help.