What a difference a year makes! For every $1,000 your monthly household budget required last Spring, you need $1,075 this year. We feel it to.
How do you maintain—or even increase—your giving when your dollar doesn’t go as far as it did last year? A gift of stock or mutual fund shares from your investment portfolio may be just the answer!
If you have appreciated stock that you’ve owned longer than one year, you can give that stock directly to The River (or any of your favorite ministries). Utilizing a stock donation, you can offset the impact of effectively having less income thanks to inflation.
Your gift of stock or mutual funds will have double—and maybe triple—the benefit over a cash gift:
- You can make a generous gift and not impact your cashflow from your paycheck.
- You can reduce the built-in capital gains tax bill that will eventually come with a portfolio increasing in value.
If you itemize, you’ll likely increase your deductions and pay less income tax this year. Your deduction would be for the value of the stock on the day the gift is received and not for the price you paid for it.
For example, if you bought 25 shares of Microsoft Stock in January of 2011 when it was trading at $28.60, it would’ve cost you $715 total. This month, while the stock is trading at $295, you give 10 of those shares to The River. Your gift of $2,950 cost you $286—plus, you have a potential $2,950 charitable income tax deduction AND likely saved more than $600 in capital gains tax.
Even if the stock market is down a bit, your gift of stock will likely still cost you less than your gift of cash—especially when you factor in inflation.
Let’s look at the difference in the appreciation of the S&P 500 contrasted to the decreased purchasing power of the US Dollar over the last 40 years.
If you invested $5,000 in the S&P 500 in 1982 and didn’t touch it, you would’ve had approximately $513,058 at the beginning of this year. That same $5,000 from 1982 only gives you approximately $1,291 in purchasing power in 2022.
When your cash is worth less and you have less of it, but you have appreciated stock, the cost of the gift is substantially less…
Double–maybe triple–the benefit…
- You can make a gift and not impact your cashflow from your paycheck,
- You can reduce the built-in capital gains tax bill that will eventually come with a portfolio increasing in value
- If you itemize, you’ll likely increase your deductions and pay less income tax.
You can make the same or a bigger gift with no negative impact to your cash flow.
What if you were able to maintain your same level of support as last year AND make a one-time gift of stock toward The River’s Spring Sharathon?
If you want to make a gift of Stock to The River, or have any questions, contact Dave Stephens.
To learn about other ways you give now or in the future, visit The River’s Legacy Giving Website.