Giving appreciated stock to nonprofit organizations is a highly effective tax strategy. During years when highly-appreciated stock is in short supply, however, implementing this strategy may be easier said than done.
This is when donor advised funds are especially helpful.
Now is the time to discuss charitable giving with your clients who regularly added to their donor advised funds during the market’s long bull run. If these clients intend to ride out today’s market conditions in their personal portfolios, this year’s bear market doesn’t mean their year-end giving has to take a hit. These clients can use their donor advised funds to support their favorite organizations at levels consistent with prior years.
Similarly, for some clients, this may be a year to consider contributing cash to a donor advised fund instead of donating highly appreciated stock. Gifts of cash could reduce the burden on a client’s personal stock positions that may have fallen in value, giving these positions more time to recover value and, at some point in the future, be contributed to a donor advised fund at a higher value – thereby resulting in a higher tax deduction for the client.
Finally, consider encouraging your clients who’ve not yet established donor advised funds at the Omaha Community Foundation to consider doing so now. Not only does a donor advised fund help organize charitable giving, but over the long term it can also protect a client’s ability to support nonprofit organizations even when market conditions are rough.
Your Partner in Philanthropy
The Donor Services Team at the Omaha Community Foundation is always happy to help your clients maximize both the philanthropic and financial elements of their charitable giving strategies. You can contact us at giving@omahafoundation.org or 402-342-3458.