What are the Benefits of Donating Securities?

Compared with donating cash, or selling appreciated securities and contributing the after-tax proceeds, donating appreciated securities directly can help save on capital gains taxes and leverage your gift!

In response to a number of inquiries around gifts of stock, volunteers for the PVSF Annual campaign are providing the following information for illustration purposes only.

If your plans involve donating securities, we urge you to discuss your individual situation with your professional advisor.

Fun Fact #1
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.

Fun Fact #2
If it’s a losing stock (and we hope you have very few of these), it’s better to sell it and give the cash.
If the stock has lost value, it’s better to sell the stock first and make your contribution to the PSVF using cash. 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.

Fun Fact #3
Giving appreciated securities is an investment in our District!
What better way to support our kids and their schools than with a smart, well-planned gift that maximizes the benefit to everyone?

Illustration of Benefits

The illustration below comes directly from one of our generous District families who has chosen to support the PVSF by making a gift of stock, kindly sharing their own experience in 2020:

“During this pandemic there are so many worthy charities who desperately need our help. Many of us have given generously and used most, if not all, of our company’s charitable matching funds.  At the same time, the stock market has seen incredible growth over the last seven months. The S&P Index is up 45% during this time. Below is a table showing the dramatic increase in stock value for a few of our local companies and employers.

* Post split

It made a lot of sense for us to give appreciated securities, rather than cash. For example, if you purchased 50 shares of Apple stock in 2015 at $27.55 and sold it in October of 2020, you would have receive received proceeds of $4,935 after capital gains taxes[1]. By contrast, if you gifted 50 shares of AAPL to PVSF, the Foundation would receive $6,060, you would pay no capital gains taxes, and you receive a charitable tax deduction equal to the value of the gift. Here are a few other examples to illustrate.”

[1] Assumes closing price as of October 14, 2020 and the highest long-term capital gains rates; 20% federal, 13.3% California and 3.8% Affordable Care Act

Start the Process of Donating Securities

First step is to fill out our Donate Securities Form.

After the form is submitted, a confirmation email will outline the final steps necessary to complete your donation.

Thank you!