Research shows only 19.2% of advisors regularly discuss charitable giving with clients, despite its significant tax advantages. Donating appreciated assets like stocks, real estate or business interests allows clients to avoid capital gains taxes while maximizing their charitable impact.
Case Study: Optimizing a $10,000 Gift
Alice, earning $500,000+ annually, wants to donate $10,000 to our Stronger Together Fund. She owns Apple stock purchased 20+ years ago (cost basis: $2,000, current value: $10,000) and has ample cash reserves.
Cash Gift Analysis:
- Charitable deduction: $10,000
- Federal tax savings (37% bracket): $3,700
- Net cost: $6,300
Stock Gift Analysis:
- Charitable deduction: $10,000
- Federal tax savings: $3,700
- Capital gains tax avoided: $1,904 (23.8% rate on $8,000 gain)
- Net cost: $4,396
Result: Donating appreciated stock saves Alice $1,904 compared to cash, reducing her gift cost by 30%.
Key Advisor Considerations:
- Assets must be held longer than one year to qualify for long-term capital gains treatment
- This strategy works particularly well for clients in higher tax brackets
- Real estate and closely-held business interests offer similar benefits with additional complexity
The Community Foundation handles all transfer logistics, from stock certificates to complex real estate transactions, enabling seamless execution while opening doors to broader conversations about legacy planning and multi-generational philanthropy.