Individuals who wish to start an endowment fund at the MCF, or who wish to donate to an existing endowment may do so by directly transferring shares of highly appreciated stock, which could result in tax savings for the donor.
The size of your benefit is your unrealized gain times your tax rate. This basic idea still applies if you’re only donating a smaller amount of stock at the lower long-term capital gains rate of 15%. If you bought a stock for $1,000 and it’s now worth $2,000, donating it directly will save you $150 to $238 in taxes ($1,000 x 15% or 20% or 23.8%). If someone didn’t know and simply changed the order (sell stock, then immediately donate the cash proceeds), that tax savings would disappear.
"…This special benefit is particularly important under the new tax law, because it applies to all donors, even non-itemizers who canʼt use charitable deductions.
Donors can benefit even when they donʼt want to change their investment portfolio. For example, instead of donating cash, a donor can give shares of appreciated stock and then use the cash to immediately purchase identical replacement shares, leaving the portfolio intact, but eliminating all capital gains." Source: Professor Russell James III , J.D., Ph.D., CFP® Director of Graduate Studies in Charitable Financial Planning Texas Tech University.
Caterpillar or State Farm employees or retirees who combine direct transfer of highly appreciated stock to the MCF along with the State Farm or CAT Foundation 1:1 matching grants program can make huge impact on their favorite cause(s) through the Morton Community Foundation.
