Ask the expert: Gift planning

Featuring Karla D’Alleva Valas, J.D., LL.M., Head of Fundraising Fidelity Charitable

Maximizing philanthropic goals

When it comes time to support their favorite causes, many donors instinctively reach for their checkbook or cash. Instead, you can potentially maximize the impact of your giving for both you and the charity when you consider giving often-overlooked noncash assets, such as appreciated stocks in your portfolio, privately held business interests, or even cryptocurrency. Because long-term appreciated holdings or investments may be prime assets for tax-efficient giving, exploring this strategy has the power to potentially take your client's philanthropy — and your overall financial plan for them — to the next level.

Q Why should clients consider donating appreciated securities?

A Donating stock directly to the charity unlocks two key tax benefits: It may eliminate the capital gains tax you are facing on the sale of the stock, and the stock donation is tax-deductible at the current fair market value. As a result, the most long-term appreciated stock in your portfolio is often the best to donate because it offers the greatest potential tax benefit.

Q What other assets should clients be considering?

A When considering which asset to give as part of this strategy, you can look beyond the traditional publicly traded securities in your portfolio. Vested shares in your company stock derived from an equity compensation program could be a powerful source of charitable funding. Long-term appreciated private company C or S corporation stock, private-equity partnership interests, or bitcoin and other cryptocurrencies can also help you realize the same tax benefits.

Q Which charities are best positioned to accept these types of donations?

A While some charities may be willing to accept noncash gifts directly, doing so requires technical administration and costs to the charity to review, accept, and process the contribution. Bringing more complex assets into the picture could even further complicate that process for the charity. Ultimately, those extra steps could reduce the amount of your donation and provide fewer funds for your chosen cause.

When you're considering making this type of donation, leveraging a charity with both a donor-advised fund program and a specialized complex asset team can be a smart move. The charity will have the guidance and resources to quarterback complex contributions from end to end.

Whether you want to give long-term appreciated public stock or a complex asset, combining a noncash donation with a donor-advised fund vehicle helps you streamline your giving — enabling you to support multiple charities from a single tax-advantaged charitable gift while keeping recordkeeping and administration simple throughout the year.

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Fidelity Charitable, an independent public charity, has helped donors support more than 328,000 nonprofits with more than $57 billion in grants. As the nation's largest donor-advised fund program, our mission is to grow the American tradition of philanthropy by providing programs that make charitable giving accessible, simple, and effective.

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Get Clients Ready for Tax Season

This comprehensive report looks at the changes to the child tax credit, earned income tax credit, and child and dependent care credit caused by the expiration of provisions in the American Rescue Plan Act; the ability e-file more returns in the Form 1040 series; automobile mileage deductions; the alternative minimum tax; gift tax exemptions; strategies for accelerating or postponing income and deductions; and retirement and estate planning.