Why donate securities?

The simple answer is that you save more, so there is more to give!

When you sell your shares for cash, you are responsible for the tax due on the gain, even if you plan to donate the proceeds from that sale. Thus, there is less money to donate and your tax receipt at the end of the year will reflect a smaller donation. However when you donate those shares directly, the capital gains tax is waived and you are able to donate the full value.

Say the current market value of securities which you bought for $1000 is now $5000, and you plan to donate all of it. Your capital gain would be $4000 and thus after selling the tax would be about $920. The amount you give would be $4080. Now, if you donate those securities directly, there is NO tax, so the amount you want to give is all there and you get a tax return of $2300 as opposed to one of just over $1800. This way, you’ll be making a greater impact AND saving money.

The giving season is already upon us, so it’s important to plan out your gifts to maximize your return at the end of this tax year. Learn more at our Giving Securities page.