Year-End Giving Options: Consider Appreciated Stock Gifts

Written by Alice Handy and Dick Mayo

Alice is the founder, former president, and CEO of Investure, an outsourced investment office for colleges and foundations with $12 billion under management. Alice generously contributes her expertise to the investment committees of the Thomas Jefferson Foundation, Monticello, the Smithsonian Institution, The American Friends of the National Gallery London, the National Trust for Historic Preservation, the United Way of Greater Charlottesville, and the Charlottesville Area Community Foundation.

Dick was a founding partner of Grantham, Mayo, Van Otterloo (GMO) and of Mayo Capital Partners in Boston, which he founded in 2002. To honor Dick for his contributions and service to Darden – the University of Virginia’s top ranked graduate business school – the University named its investment center for him in 2014. Dick also chairs Darden’s investment committee.

As the market indices have reached new highs, many investors have substantial, unrealized gains in their portfolios. Alice and Dick encourage the Foundation’s friends and supporters to take a look at gifts of appreciated stock. “Warren Buffet once told me that giving cash when you could give appreciated stock is like giving 60 cents on the dollar,” says Dick.

Advantages of Gifts of Stock
As you consider contributing to the Foundation, please consider donating appreciated stock. Donating stock directly to a charitable organization is highly tax efficient; if you donate assets directly, there is no capital gains tax to pay. The federal capital gains rate is currently 20%, but many states have significant, additional taxes on gains, ranging from 5.25% in North Carolina to 13.3% in California. Surprisingly, nationally, 80% of donors own appreciated assets, like stocks, but only 21% of those have contributed these types of assets to charity.

By donating stock that has been held for over one year, you can deduct the full fair-market value of the assets, without owing capital gains tax, up to the amount allowed by the IRS and the relevant state tax authorities. Effectively, you can give 20+% more net than by donating cash, for the simple reason that you avoid the long-term capital gains taxes. Furthermore, the Foundation may benefit from the potential future appreciation of donated assets.

As always, the Foundation is grateful for any and all donations as we work together to bring this life-changing technology to those in great need. We hope you will think of supporting the cause in 2021 and we thank you for your consideration in advance.

Always consult with your tax advisor for specific tax information when giving securities, as certain limitations to deductions may apply.

For more information, you can visit the Gifts of Stock section of our website or contact Jessica Lukens at (434) 326-0924.