Stock Investment Plan Influences Gifts to Foundations


A robust stock market continues to play an important role in charitable giving.

In 2018, the latest full year for which data is available, the Community Foundation of Greater Des Moines reported that it received $63.7 million from donors. Approximately $18.47 million of that was comprised of marketable securities.

Results from 2017 and 2016 show that even more securities went into Foundation coffers–$25.6 million worth in 2017 and $22.5 million in the prior year.

Gifts to the Foundation, which serves as a conduit for charitable donations to hundreds of non-profit agencies throughout central Iowa, is comprised of cash, securities and non-cash assets (such as real estate, farm crops, or even an ongoing business).

Securities donations carry a bonus because of the value appreciation that typically lies behind them. Say you bought Wal-Mart Stores Inc. way back when, when it was worth $10,000. Now it’s worth $200,000.

If you sell that stock, you’ll owe capital gains taxes on the $190,000 profit. But if you give it away, there not only is no tax, but you get a deduction for the current value of $200,000.

This works for any appreciated asset – such as land. But it’s most commonly found with stocks, especially those with a low cost basis.

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