When donating to charity, a stock donation is often a better option than handing cash to your favorite nonprofit organization. Nonprofits love to accept cash donations, but it is not always the most financially sound way to finance operations from a donor’s perspective. While many veteran investors know and understand stock donations’ value, many more are just getting started. We help everyone who wants to donate stock to charity to do it in the easiest, fastest, and most convenient way possible. This article will look at the seven most important things you should know about making stock donations.
#1: The Tax Benefits Of Giving a Stock Gift to Nonprofits Are Enormous
All seasoned investors and entrepreneurs know the basics of the capital gains tax. You must pay taxes on all stock profits, which range between 10% and 37%. The minimum tax on long-term appreciated stocks owned for more than one year is 20%. That is a hefty price tag for stock profits. Fortunately, there is a way to avoid this tax by gifting your long-term appreciated stocks to a 501(c)(3) nonprofit. You will be able to provide a much-needed economic boost to the causes and movements you care about most while receiving a tax deduction for the fair market value of the donated shares to that nonprofit.
#2: Billions of Dollars in Stock Donations Are Made Each Year to Nonprofits
In 2019, Warren Buffett donated $3.6 billion of Berkshire Hathaway stock to five different charities, which brings his total stock gift donations to almost $35 billion. In 2006, Buffett pledged to give away his entire fortune in shares. Donating securities is a popular and smart investment move for the wealthy, which means it would be a good idea to start considering this strategy for your benefit as a donor.
A Harvard study in 2018 found that there has been an enormous increase in private wealth accumulation and a growing chasm of persistent inequalities in the economy and society. For these reasons, people often find themselves looking to donate to charity in ways that would make a difference. You can make a significant stock gift through us, which opens the door to more impactful charitable giving.
#3: You Can Integrate Your Investment Strategy with Your Charitable Giving
Leveraging the tax-effective tactics will allow you to give more through a stock gift than you otherwise could by donating cash. Capital gains tax is something every smart investor is looking to reduce or avoid. At the very least, you do not want your portfolio to have such high capital gains that you lose what could have been gained if the securities had been handled differently.
For example, if you donate $100,000 as a stock gift, the nonprofit would receive the full amount of that gift, and you can deduct it from your taxes. You will not owe any money on the gains. However, if you were to sell that appreciated stock and then donate that money to charity, it would be taxed first, which would reduce the amount given to the charitable organization. Knowing this can make a big difference in how you approach stock donations when reviewing your portfolio.
#4: A Stock Gift to a Nonprofit Allows You to Optimize Your Portfolio
Much like your health, portfolios can become “sick” or at risk of getting sick. There are obvious risks in turning a profit on stocks and other securities. Wealthier investors find that stock donations help them rebalance and optimize their portfolio. Rather than taking the losses and keeping high-risk options, they channel the money into the incredible organizations that make our communities whole and healthier. A stock gift helps savvy investors adjust their portfolio to meet the demands of the ever-changing financial market.
#5: You Can Donate to Nonprofits with ETFs and Other Securities Too
The versatility of stock donations to nonprofits is attractive to long-term investors and entrepreneurs. We all want to donate to a nonprofit when our wealth grows. Cash assets are not as easy to part with, so a stock gift is the next best thing, not to mention much more impactful. You can donate EFTs, long-term stocks, and other securities in a safe and secure platform at Stock Donator. We minimize the tedium of paperwork, keep you informed of your donation’s status, and provide powerful free tools that allow you to donate to multiple charities whenever it is convenient for you.
#6: Making a Stock Donation Online is Safe & Secure, But You Should Still Do Your Research
There is nothing quite as infuriating as donating to a charity that turns out to besmirch nonprofit organizations’ reputation. That is why we partner with reliable, well-known, and regularly monitored 501(c)(3) organizations. However, it is still essential to do your due diligence. Be sure to check your chosen nonprofit’s mission, specific programs, and financial records before deciding which organization to support. Further, it is good to find a reliable donation platform that can demonstrate excellence through public reviews. Charitable giving is nuanced, so there is no standard process. You need world-class customer service from people you can trust.
#7: Do Not Underestimate the Psychological and Physical Benefits
Charitable giving is a mood booster. The positive effects of donating to charity extend well beyond mental and emotional health. It makes the world a better place, where people take care of each other and fight for the causes they believe to be most essential. It gives one a feeling of being a part of something bigger. Charitable giving also reduces stress, and stress is a well-known culprit to deteriorating physical health. Whether your reason for giving is due to a desire to do good, improve your social status, or just because you can, the result is always positive. The nonprofit organization that receives your stock donation will benefit economically and subjectively. You will benefit physically and mentally. It is another win-win that’s easy to attain.
While there are many benefits to donating a stock gift to charity, not many people realize how easy it is to contribute more to nonprofits. At Stock Donator, you can read more about how to donate stocks online. We are the team that helps you make the most of your donation. We provide a list of reliable nonprofits, but you can also donate to a nonprofit organization that is not yet listed by merely asking that nonprofit organization to sign up for a free account. When you’re ready to start giving, you can sign up for a free account to keep track of your donations. Your stock gift will make a difference in your life and the lives of many others.