 Helpful Articles
from David Vollrath,
Union County Foundation Executive Director
The Foundation encourages you to work closely with your professional advisor(s)
as you develop your estate plan and consider your present and future charitable goals. |
How to Donate Stock to Charity
(Part of a series of articles on charitable giving and the Union County Foundation
by David Vollrath - Exec. Dir.)
Donating stock to charity is both easy to accomplish and can result in significant
tax savings. As previously discussed, donations of stock result in a charitable deduction plus avoid capital gains
tax on the stock’s appreciation. Example: Gifting $5000 worth of stock with a cost basis of $2000 results in a
$5000 charitable tax deduction and avoids the 15% capital gains tax ($450) on the $3000 of appreciation.
Once you have decided to gift the stock how do you complete the transaction? There are several methods for transferring
stock to charity depending on how the stock is held. For example you may hold actual shares of stock in certificate
form or you could hold stock in an account with a brokerage or securities firm.
If you hold the actual certificates you can simply endorse the back of the certificates and personally deliver
them to the benefiting charity. The charity will then assume the responsibility of transferring the certificates
into their organization’s name. If the donor cannot physically deliver the certificates to the charity he or she
can safely mail them in one envelope via registered mail. In a second envelope enclose a "stock power"
which is a document used to transfer stock. The stock power has a signature guarantee meaning a third person, usually
an individual from a bank or securities firm, has witnessed the transfer. By sending the stock and the stock power
in separate envelopes, you can more safely make the transfer. The charity needs both the stock certificates and
the stock power to complete the gift.
If you hold your stock in a street account at a brokerage firm or financial services firm then they should be able
to provide you with a transfer form. You will simply fill out the provided form and direct the firm to initiate
the transfer. In some cases the brokerage firm will create a new street account for the charity or they might transfer
the securities directly from their firm to the brokerage or financial firm that maintains the account for the charity.
Sometimes a business owner wants to gift shares of a closely held private company. The gifting of these stock shares,
just like publicly traded shares, results in a tax deduction on the appreciated stock value. In this situation
the company stock certificates are usually transferred to the charity and immediately returned to the company.
The company then would reissue new certificates in the name of the charity. Typically the company might then buy
back the stock, giving cash to the charity while maintaining control of the stock.
The Union County Foundation is equipped to help you achieve your charitable goals by providing pertinent information
and assisting you with planned giving. Please call us at 937-642-9618, email info@UnionCountyFoundation.org, reference our website at www.emarysville.com/unioncountyfoundation, or stop by our Marysville
office at 126 N. Main St. We are committed to helping you.... “preserve your footprint in time.” |
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