The Perfect End of Year Gift: Appreciated Securities
As we approach the end of the year, donors are seeking meaningful ways to make a lasting impact through their charitable contributions. With the stock market reaching all-time highs, one strategy that stands out for its dual benefits of philanthropy and financial savvy is the donation of appreciated securities to endowment funds benefiting Catholic causes.
“There are a number of advantages for the donor when they gift appreciated securities directly to the Catholic Foundation,” said Pete Waldron, President of the Catholic Foundation of Eastern Pennsylvania. “It is a perfect end-of-year gift for donors looking to make a significant, long-lasting impact on their favorite Catholic cause.”
5 Advantages of Appreciated Securities
Here are a few advantages to consider when gifting appreciated securities to an endowment fund managed by the Catholic Foundation:
1. Tax Advantages
Donating appreciated securities can offer donors substantial tax benefits. When securities have appreciated in value, the donor can generally deduct the full fair market value of the asset at the time of donation, without incurring capital gains taxes. This presents a unique advantage over cash donations, where the donor might be liable for capital gains taxes on the appreciated value.
2. Enhanced Giving Power
By donating appreciated securities directly to a nonprofit endowment fund, donors amplify their giving power. Nonprofits can sell the securities without incurring capital gains taxes, allowing the full value of the asset to be directed toward the organization’s mission. This enables donors to contribute more to the endowment fund than they might with cash donations, ultimately increasing the long-term financial stability of the nonprofit.
3. Portfolio Diversification
For donors with highly appreciated securities in their investment portfolios, donating these assets can be a strategic way to rebalance and diversify their holdings. By contributing appreciated securities to a nonprofit endowment fund, donors can align their philanthropic goals with financial planning, optimizing both their charitable impact and their personal financial objectives.
4. Legacy Building
Endowment funds are designed to provide a lasting source of income for nonprofits, ensuring their sustained impact over time. Donors contributing appreciated securities to an endowment fund are effectively building a legacy, as the enduring growth of the fund will continue to support the organization’s initiatives for years to come. This approach allows donors to leave a lasting imprint on the Catholic causes they care about.
5. Simplicity and Efficiency
The process of donating appreciated securities is streamlined and efficient. With the assistance of financial advisors and the Catholic Foundation, donors can easily transfer the securities to the endowment fund. This simplicity contrasts with more complex forms of giving, making it an attractive option for donors seeking a hassle-free way to contribute meaningfully.
“The combination of tax advantages, enhanced giving power, portfolio diversification, legacy building, and simplicity positions this approach as an ideal means for donors to make a lasting impact on the Catholic causes they love, while optimizing their financial resources,” Waldron said.
Invest in Forever With Appreciated Securities
As donors contemplate their end-of-year giving strategies, donating appreciated securities to Catholic endowment funds emerges as a powerful and strategic choice.
By leveraging the benefits of appreciated securities, donors can contribute to the long-term sustainability of Catholic parishes, schools and ministries.
“Together, we can ensure that your favorite Catholic cause has the income it needs to fulfill its mission forever,” Waldron added. “That is a wonderful gift not only during this season of giving, but during the rest of the year as well.”
Interested in finding out more about how appreciated securities can help support the Catholic causes closest to your heart? Please contact the Catholic Foundation at [email protected].