4 reasons to donate stock to Thrive
By Pastor Tom Anderson
You are familiar with cash giving — you write a check or make a credit card payment, and your money is put to work supporting Thrive Church. But did you know that cash isn’t the only thing you can donate? Many donors are choosing to give shares of stock because it comes with some pretty big benefits.
But first, what is stock? Stocks are a type of investment that represents an ownership share in a company. When a stock increases in value over time, that’s known as “appreciation.” While it might seem confusing or difficult to donate stock, it’s actually pretty simple.
Maybe your stocks have appreciated greatly since you purchased them. Maybe a surge in the value of one of your holdings has thrown your portfolio off balance. Maybe you just want to refocus on other investment categories. If you also give to Thrive, these scenarios should encourage you to review your investment portfolio with a donation strategy in mind.
Why? Because donating stock directly to Thrive is a tax-smart way to give. Yet, it is often not well understood or widely used.
Giving appreciated stock you’ve held for more than a year is better than giving cash.
If you donate stock that has increased in value since you bought it more than a year ago – and if you itemize deductions — you can take a charitable deduction for the stock’s fair market value on the day you give it away. You’ll also avoid capital-gains taxes on the increase in value over time, which you would have had to pay if you sold the stock then gave the charity the cash proceeds. You can deduct the fair market value only if you hold the stock for more than a year before giving it away. If you’ve held it for less than a year, your deduction is limited to your cost basis — what you paid for the stock –, not the current value.
By donating stock that has been appreciated for more than a year, you are actually giving 20 percent more than if you sold the stock and then made a cash donation. The reason is simple: avoiding capital gains taxes.
If the stock has lost value, it’s better to sell the stock first and give the cash to the charity. You’ll still be able to deduct your charitable donation if you itemize, but you’ll also be able to take a capital loss when you sell the investment.
Donating stock is a simple process that does not require paperwork or multiple phone calls. Information about giving stocks to Thrive can be found in our online brochure “Gifts in Kind” or contact our treasurer, Andy Persons.
