Stock(ing) Stuffers

A Year-Round Strategy for Charitable Giving

Gifting stock to charity is one tactic that is gaining popularity for its benefits to both donors and recipients. The idea is not new; many advisors suggest this strategy at calendar year-end, when evaluating mitigation possibilities. In fact, this is a method that should be examined throughout the course of the year. The strategy applies to securities held for more than one year, facilitating the rebalancing of investment portfolios. For families reconsidering equity positions in relation to recent market volatility, for example, the transfer of appreciated stock may help to offset other sources of earnings or investment income to boost overall liquidity.

This is a proven technique that continues to be overlooked and underutilized. While gifting stock is not a philanthropic approach that appeals to everyone, it does present an alternative or complement to more active engagement. In fact, some clients have funded the launch of family foundations through gifts of qualified appreciated stock. As with most tax strategies, many restrictions do apply, so it is important to consult with professionals to ensure optimal benefit and compliance with relevant regulations. This strategy can make all the difference in achieving meaningful charitable impact and tax mitigation, with or without the overhead and administrative aspects of a philanthropic foundation.