Appreciated Stocks: Maximize Your Giving Impact


Recent stock market growth has led to significant appreciation of stocks, creating a prime gifting opportunity. However, not all giving methods offer the same impact. You might consider simply selling your appreciated stocks and sending a cash gift to your chosen ministry, but the taxes you may pay could make this a less-than-optimal method. There is a better approach.

Instead of selling and simply writing a check to your chosen ministry, consider gifting the appreciated stocks themselves. By doing so, you may be able to increase income, avoid upfront capital gains, and potentially create a charitable deduction, all of which can increase your giving impact.

3 Tools Perfect for Appreciated Stocks

1. Donor Advised Fund
A Donor Advised Fund (DAF) is a flexible giving tool that allows you to continue to control the amount and timing of your gifts to ministry—while realizing tax benefits now. Under this agreement, charitable contributions may be made in your name and you can make ongoing recommendations as to how funds will be distributed to ministry. A gift to a DAF can provide you with a charitable income tax deduction and help you potentially avoid capital gains taxes on appreciated assets such as stocks.

2. Gift Annuity
For individuals over the age of 70, funding a Gift Annuity with stocks may provide a guaranteed income stream for you and your spouse for life. As the donor, payments and rates are calculated based on your life expectancy. It’s a great solution if you have appreciated stocks because it pays an attractive fixed payment guaranteed for life, as well as offering special tax benefits. Upon your death, ministry will be blessed with the remaining funds.

3. Charitable Remainder Trust
Establishing a Charitable Remainder Trust may provide lifetime income for you and your spouse and also potentially provide income to children or other third parties for up to 20 years. It’s an excellent alternative to an outright sale of appreciated stocks. The funding of the trust creates an immediate charitable tax deduction, and stocks sold may avoid imposition of upfront capital gains. Income is payable to named parties in either fixed or annually adjusted payments. Upon termination of the trust’s term, the remaining principle is transferred to a named charity or ministry of your choice.

In today’s market, appreciated stocks can provide a beneficial alternative to giving cash to ministry. It’s an alternative that can maximize your giving impact for years to come.

For more information about these planned giving tools, call 866.621.1787 to speak to one of our consultants.

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