Gifts of Stock & Mutual Funds
Publicly Traded Stock
What is this?
Securities (also known as stocks) are purchased on the open market (such as companies like Microsoft or Home Depot) that can be easily traded on an exchange. Instead of selling the stock on the open market, it is donated.
Who is it a good option for?
This option is good for people who have purchased the stock over a year ago and therefore may be subject to long-term capital gains (and don’t want to incur capital gains tax if they sell it). Also, people who have “too much” of one type of stock in their investment portfolios (outside of a retirement plan), known as being “overweighted” in one asset class, and want to reduce risk by “re-balancing” and unloading that stock to charity.
Financial Benefits
The donors waive all capital gains tax liability upon the donation, thereby reducing risk in the portfolio, and are eligible for a charitable income tax deduction (for the year of donation, and then carried forward five years more, as appropriate, to maximize the deduction).
What do interested parties need to prepare for a meeting?
Having answers to these six questions:
- Who is the registered owner of the shares?
- What fund is the gift going into?
- When are the shares expected?
- What shares and how many are coming, and expected total dollar amount?
- What broker/trust company are they coming from?
- What is the cash/invested allocation? In other words, how much does the donor want to keep in cash within a new or established fund (e.g. a DAF)?
Mutual Funds
What is this?
A collection of securities (e.g. large cap value, municipal bonds, small cap growth) purchased on the open market (like Microsoft or Home Depot) that can be easily traded on an exchange. Five capital letters are usually the symbol to identify the stock (e.g. ABCDE). As with stocks/securities, they can be donated.
Who is it a good option for?
This is good for people who have purchased the mutual fund shares over a year ago and therefore may be subject to long-term capital gains (and don’t want to incur capital gains tax if they sell them). Also, it’s good for people who have “too much” of one type of mutual fund in their investment portfolios (outside of a retirement plan), known as being “overweighted” in one asset class, and want to reduce risk by “re-balancing” and unloading that mutual fund to charity.
Financial Benefits
The donors waive all capital gains tax liability upon the donation, thereby reducing risk in the portfolio, and are eligible for a charitable income tax deduction (for the year of donation, and then carried forward five years more, as appropriate, to maximize the deduction).
What do interested parties need to prepare for a meeting?
Having answers to these six questions, similar to stocks/securities:
- Who is the registered owner of the shares?
- What fund is the gift going into?
- When are the shares expected?
- What shares and how many are coming, and expected total dollar amount?
- What broker/trust company are they coming from?
- What is the cash/invested allocation? In other words, how much does the donor want to keep in cash within a new or established fund (e.g. a DAF)?
Privately Held Stock
What is this?
Securities that are NOT purchased on the open market which usually need to be sold to a specific party, not unlike real estate or another type of illiquid asset. These can be considered for donation.
Who is it a good option for?
Individuals who have received this type of stock, which may have long-term capital gains, and these individuals are charitably inclined. They may also want to move the asset outside of their estate. They may also have a time frame in which to dispose of this asset.
Financial Benefits
The donors waive all capital gains tax liability upon the donation, thereby reducing risk in the portfolio, and are eligible for a charitable income tax deduction (for the year of donation, and then carried forward five years more, as appropriate, to maximize the deduction).
What do interested parties need to prepare for a meeting?
Having answers to these eleven questions (the typical six questions asked of publicly traded stocks or mutual funds, plus five more):
- Who is the registered owner of the shares?
- What fund is the gift going into?
- When are the shares expected?
- What shares and how many are coming, and expected total dollar amount?
- What broker/trust company are they coming from?
- What is the cash/invested allocation? In other words, how much does the donor want to keep in cash?
- Would the company and/or other shareholders be in a position to purchase the shares?
- How quickly might the shareholders or the company be in a position to buy the shares?
- Would you make the gift of shares all at once or in several stages?
- Would you donate any of the shares during your lifetime, through your estate, or both?
- Prior to accepting the shares, see the company’s articles of incorporation, bylaws, shareholder agreements, and recent financial statements. Is that possible?
Please utilize the instructions below to make stock donations to Easterseals NH.
DTC Clearing Number: 0015
FBO Easter Seals
Account number: 419-018469-032
Morgan Stanley
Owen McGarrahan or Kristi Johnson
Phone: 603.629.0221
Email: [email protected] and [email protected]
1000 Elm St. 14th Flr.
Manchester, NH 03104
Please ask instruct your broker to share the designation of your stock gift, as well as your contact information for acknowledgment purpose.
If you have any questions or would like additional information, please reach out to our Development Department at [email protected].