Giving Securities

Why Give Securities?

Why give securities rather than write a check? The answer is quite simple. Our nation’s tax laws offer special incentives for gifts of non-cash property—especially when it has increased in value since it was acquired.

How Much is Deductible?

Just as cash gifts to charitable organizations and institutions are deductible from federal income tax returns for those who itemize, gifts of qualified non-cash properties are also deductible.

How Much Can You Deduct?

Is the deduction for the cost of the security, the value, or the value minus capital gains taxes? You may be surprised to learn that in most cases the deduction is for the current fair market value of the securities given.

The deductible amount includes both what you paid and your gain. So, you can use the amount of the “paper profit” as a tax deduction even though it has never been taxed. This can dramatically reduce the cost of making a charitable gift or help increase the amount you can afford to give.

Making the Gift

After you have decided which security you will give and its amount, your investment broker can help you complete the gift. The method chosen will affect the date of transfer for valuation and other purposes.

Methods to Consider

Send the unendorsed stock certificate and a signed stock power (available from your broker) in separate envelopes. The gift is complete on the date of postmark on the envelope last received.*

*In addition, a "gifting letter" is also needed to give stock. This letter should be signed and dated, with words to this effect:

"I (name) do hereby donate ______ shares of  _______  common stocked to Bethel University.
(signed)______"

If your broker holds a security for your account, instruct your broker to transfer the securities to the account of the organization. Encourage your broker to contact the Bethel Office of Development for specific instructions. The gift is complete on the date the transfer is made.

When giving other types of securities such as mutual funds, bonds, notes, or mortgages, specific advice of your broker or other professional advisor should be obtained.