Gifts Of Stock And Mutual Funds
When considering a charitable gift, most people think of writing a check and may overlook other assets that allow them to provide greater support for the causes they care about. Donating stocks or mutual funds can be a great option, but few nonprofits are equipped to accept these gifts.
Gifts of stock or mutual funds can make an ideal charitable gift for both the donor and the nonprofit.
At the Saint Paul & Minnesota Foundation, we’ve been helping Minnesotans make gifts of stock and mutual funds to support their favorite causes for decades.
Here’s How a Donor Advised Fund Works
A donor advised fund (DAF) at the Foundation can accept gifts of stock, appreciated stock and/or mutual funds. Those gifts are liquidated tax-free and the cash is available to grant to the nonprofits of your choice. It’s that simple.
Financial Benefits of Giving Public Stock or Mutual Funds
- The charitable deduction is based on the fair market value of the stock or mutual funds on the day of the gift.
- Capital gain may be avoided upon transfer to your fund.
- Shares are sold tax-free by the Foundation.
- Stock and mutual funds can be used to establish many types of gifts, such as a charitable gift annuity or charitable remainder trust.
Get Started Today
- Talk with a Foundation Gift Planner about your charitable goals.
- Our experienced staff will work with you and your advisors to determine if a gift of stock or mutual funds is right for you.
- Establish your own donor advised fund (DAF) and transfer stocks or mutual funds, which will be liquidated tax-free.
- The resulting cash proceeds are available to grant to the nonprofits of your choice.
How Margaret Donated Appreciated Stock to Establish Her Donor Advised Fund
Margaret’s accountant recently suggested she consider donating appreciated stock, rather than writing checks, to the many nonprofits she supports each year. Her accountant explained that her stock portfolio was much larger than her cash accounts, that she could afford to give more in the form of stock than in cash, and that gifts of appreciated stock could offer significant tax benefits over cash gifts. The charitable deduction for a gift of stock is based on the fair market value, regardless of how much Margaret paid for the stock.
Margaret contacted her favorite nonprofits to discuss a gift of stock, but learned few were equipped to accept this type of gift. Fortunately, her accountant had advised several other clients to open a donor advised fund through the Saint Paul & Minnesota Foundation.
Margaret and her accountant met with a Foundation Gift Planner to discuss Margaret’s charitable goals and how a donor advised fund works. Margaret started her own fund, with plans to contribute more stocks each year to continue supporting her favorite causes.