Non-cash Assets: Why You Should Talk to Your Clients about Their Giving Options
Expand your clients’ giving options by partnering with the Saint Paul & Minnesota Foundation, the go-to place for non-cash asset donations.
By Mai-Anh Tran-Kapanke, Saint Paul & Minnesota Foundation Associate Vice President of Philanthropic Services
Most of us don’t wake up one morning and say, “I want to make a charitable non-cash gift."
But, many of us do imagine what it would feel like to make a significant impact on the organizations and causes we care about.
It’s not uncommon that your clients might limit their giving to cash reserves and don’t think about giving other assets like stock, real estate or retirement accounts. But thinking about charitable giving in cash-only terms limits the impact your clients can make on their favorite causes because less than 10% of America’s wealth is held in cash1.
Donating non-cash assets may provide multiple benefits to your clients while also allowing them to support causes they care about in a more significant way. Learn more about the benefits of giving noncash donations in my video below.
Hi, I'm Mai-Anh Kapanke, Associate Vice President of Philanthropic Services at the Saint Paul & Minnesota Foundation. Thank you for joining me to talk about non-cash assets.
If you've experienced what our Philanthropic Services team has with the pandemic, then chances are you've had quite a few conversations with your clients about charitable giving.
Your clients, our donors, they've been extremely generous. You may also be aware that only six to eight percent of America's wealth is held in cash, meaning the majority of wealth is held in these non-cash assets.
I'd like to share with you how the Foundation can support you and your clients to maximize their giving by supporting their favorite causes with assets like real estate, privately held stock, and even farm equipment, just to name a few. It may surprise you that we can even accept commodities. We have several farmers in rural Minnesota who donate harvested grain to fund their donor advised funds. This allows them to support their favorite charities with an asset that most people wouldn't think could benefit a nonprofit. Many small to medium-sized, nonprofits are not equipped to accept non-cash assets.
At the Saint Paul and Minnesota Foundation, we are your partner to help your clients make a significant impact on their favorite causes and nonprofits. Our staff is trained to explore which of your clients assets are the right charitable vehicles to deploy and then turn those goods into gifts. Through experience we know that donating a non-cash asset is often more financially beneficial to both the non-profit and the donor, the tax benefits can be higher, and the non-cash assets are often more valuable. In fact, cash is one of the most tax inefficient ways to make a gift. Planning experts like you can help your donors increase their ability to be more charitable, which is an all-around great feeling for you, your clients, and your partners here at the Foundation.
I'd like to leave you with the story of a couple who was creative with their giving. Amelia and Harvey evaluated their charitable goals and the assets they owned. They landed on establishing a donor advised fund by donating business stock which was sold free of capital gains taxes, leaving 100 percent of those proceeds available to grant to their favorite nonprofits.
This is just one example of many. For decades we have partnered with professional advisors to support individuals, families and businesses to support causes they care about...from helping your clients identify their giving goals, to maximizing tax benefits, and tailoring your clients charitable giving plan, we are here to support you.
To learn more about the benefits of giving noncash assets and how we can partner with you and your clients, contact one of our gift planners at 651.224.5463, or philanthropy@spmcf.org to discuss charitable giving options, or please visit our website at spmcf.org under the advisors tab. Have a great day.
Why Your Clients Give
Talking to your clients about their charitable goals is just as important to them as their other financial goals2 — and the conversation isn’t that different.
As a professional advisor, you make financial recommendations to your clients based on what your client is trying to accomplish.
For example, when do they want to retire? Do they want to cover all their children’s college expenses? Do they want to purchase a vacation home? These are all financial goals, but they are based on personal aspirations.
Charitable goals are also based on personal aspirations. They are not based on the desire for tax savings. In fact, a 2018 study by U.S. Trust and The Philanthropic Initiative showed that only 16% of consumers feel tax savings is an important reason they give3.
Top rated reasons to give were:
- passion for the cause
- impact
- desire to give back
Therefore, you cannot talk to clients about their charitable goals only in terms of tax deductions.
First, understand what they are trying to accomplish. Then you can discuss which assets to give and what giving techniques will work best. The conversation about what they are trying to accomplish can take some time. It’s not something most people spend a great deal of time thinking about until they are asked.
“ Donating non-cash assets may provide multiple benefits to your clients while also allowing them to support causes they care about in a more significant way.”
Local community foundations such as the Saint Paul & Minnesota Foundation work with you and your clients to help outline the best ways for them to give.
If you don’t feel you have the tools necessary to talk to your clients about their giving goals, we’re here to help. For more than 80 years we’ve partnered with people to fulfill their giving goals and to connect them with nonprofit organizations that are doing exactly the kind of work they are looking to support.
Non-cash Assets That Work Best for Charitable Giving
Once you’ve helped your clients articulate exactly what they’re trying to accomplish, it’s time to turn your attention to what assets they have available, and what makes the most sense to give.
At the Saint Paul & Minnesota Foundation, we have an experienced team that can process the following gifts and more:
Stock and Mutual Funds
Real Estate
- Charitable Life Insurance
- Farm Assets
- Retained Life Estate
- Cryptocurrency, such as Bitcoin
- Privately Held Stock
- Retirement Assets
Considerations for Choosing the Right Asset to Give
Each noncash asset is unique. We’ll consult with you and your clients to assess which assets might best suit their charitable giving goals. We will also work with you and your clients to determine the best giving method and then transfer the asset so that it can be used to fulfill your client’s philanthropic vision.
In most cases the non-cash donation should be an asset your client no longer needs, and that they don’t plan on giving to family.
Since not all assets are treated the same for tax purposes, it also makes sense to know whether the client wants to make charitable gifts during their lifetime or save significant giving until after they’ve passed away. Most of the time, people would love to make lifetime gifts, but they first must feel confident that they will have adequate assets to live on and pass on to their heirs.
Having a partner that can advise on, accept and process gifts of non-cash assets can allow you to provide expanded services to your clients — while increasing their satisfaction and ability to impact their community.
Tax-Advantageous Assets
When it comes to choosing the right asset, some of the most tax-advantageous assets to give during life are capital gain assets such as stock and real estate, as well as qualified charitable distributions from IRAs (for those clients who are 70.5 or older).
Capital gain assets can offer a fair market value deduction and avoid accumulated capital gains tax. Qualified charitable distributions can completely avoid income tax and count towards a required minimum distribution. Read more about these QCDs.
Estate Gifts
As for gifts that support causes after someone has passed, one of the best options may be a beneficiary designation from a qualified retirement account. If left to heirs, those assets are often 100% taxable at the person’s highest ordinary income tax rate.
Asset Donations That Provide Income
If your client is looking for additional income and wants to make a significant gift, then it might be time to check out life income gifts like a charitable remainder trust or charitable gift annuity.
These are powerful tools that can accomplish multiple goals – a charitable gift, additional income and tax savings. As with any powerful tool, the devil is in the details – so it’s best to make sure you have an expert at your planning table.
The Saint Paul & Minnesota Foundation can offer expertise about these giving techniques.
How DAFs Support Your Clients’ Giving Goals
Not all nonprofits are equipped to accept non-cash gifts, and your clients may want to support a variety of organizations with their non-cash gift. That’s where donor advised funds can help.
Donor advised funds or DAFs can accept a variety of charitable assets, including with cash, stock or other assets like real estate or farm equipment. When your client transfers assets to the DAF, they typically receive an immediate tax benefit. Then their contributions can appreciate tax-free to grow their philanthropic capacity over time and make grants to support their favorite nonprofits.
It’s a win-win for everyone involved. Your client gives a valuable asset they no longer need to their DAF and receives the corresponding tax benefits. Your client’s favorite organizations receive grants to put toward their important work.
DAFs are available through national providers affiliated with financial institutions and local community foundations like the Saint Paul & Minnesota Foundation. The national providers tend to offer a more transactional experience (think of online bill pay), while community foundations offer a more relationship-based experience. Our donors are connected to a dedicated philanthropic advisor who can help them find organizations doing the kind of work they want to support and offer gift planning guidance in conjunction with their other professional advisors.
At the Foundation, our Philanthropic Services team is here to support you and your clients to help their gifts go further. We offer expertise on non-cash giving and work closely with our Community Impact team to connect your clients with local nonprofits that match their giving goals. To learn more, call 651.224.5463 or email our team at philanthropy@spmcf.org.
Examples of Donors Giving Non-cash Assets
Real Estate Donation Offers One Donor New Ways to Support Human Rights
Learn how fundholder Dick Senese turned his property into gifts for his favorite causes with a real estate donation to his donor advised fund.
Read Dick's story
Gifts of Grain
Here’s how one Minnesota farmer turned his crops into resources for the community.
Learn More
Donated Real Estate into Community Resources
Learn how Lisa and Jerry O'Brien turned their condominium into continuous support for their favorite causes.
Read Their StoryThe Benefits of Certain Noncash Donations
Three Benefits of Donating Real Estate
Charitable contributions of real estate are a great way to give back to causes you care about. Here are three benefits to giving real estate.
Learn More
Donating Retirement Assets
Here are three common ways donors can give retirement assets to the causes they care about.
Learn More
Benefits of Donating a Business or Donating Private Stock
Considering a business transition? Here’s why you should consider making charitable giving part of any business exit plan.
See the benefits
Helping Your Clients Donate Life Insurance
Help your clients build their charitable legacy with donations of life insurance.
Learn More
How to Donate Crops and Other Farm Assets
Learn how giving crops, farm equipment or livestock can allow farmers to support nonprofits they care about.
Learn More
The Gift of Cryptocurrency
Make cryptocurrency part of your or your clients' charitable giving plan.
See how
Donating Stock to Support Your Favorite Charities
Did you know that donating stock can grow your charitable impact and support your favorite nonprofit organizations?
See HowAbout the Author
As the Associate Vice President of Philanthropic Services, Mai-Anh Tran-Kapanke supports a seasoned team of philanthropic advisors, gift planners and development & operations staff who provide high-touch services to donors, nonprofits, community affiliates and professional advisors across the state. In addition, she partners with some of the Foundation’s longest standing donors to help them with their philanthropic journey and charitable goals.
Mai-Anh has more than 25 years of experience in nonprofit management & executive leadership, board management, fundraising & donor relations, and marketing & communications as a former executive director of several statewide and international youth-serving nonprofits.
Mai-Anh graduated from Michigan State University with a journalism degree and minor in English. She is a former Humphrey Policy Fellow at the University of Minnesota and completed the University of St. Thomas Institute for Executive Director Leadership program. She received her Certified Fund Raising Executive (CFRE) certification through Boston University.
1 "The Wealth of Households: 2020," Hays, Donald, and Briana Sullivan, Current Population Reports, P70BR-181, U.S. Census Bureau, 2022.
2 "2023 Bank of America Study of Philanthropy: Charitable Giving by Affluent Households," Bank of America, 2023.
3 "The U.S. Trust Study of The Philanthropic Conversation," PDF, U.S. Trust, 2018.
The Saint Paul & Minnesota Foundation does not provide tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors regarding your individual situation before engaging in any transaction.
This post was originally published on June 3, 2021, and updated October 20, 2023 and again on April 16, 2024.
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