As an estate planning, tax, or wealth advisor, you play a key role in helping your clients make the most of their charitable giving while also maximizing potential tax benefits.
A 2023 survey found that only 19.2 percent of advisors regularly talk with their clients about charitable giving. Another 44.2 percent do so only once in a while.
That’s where the Crawford Heritage Community Foundation can help. We’re here as a partner and resource for all things related to charitable giving. When the topic comes up and your clients are interested in supporting causes they care about, we can help explore the options. Just bring us into the conversation.
Of course, one of the challenges is knowing how to start that conversation. A great way to begin is by discussing the benefits of donating highly appreciated assets, such as stocks or real estate, to a fund at the community foundation. To help you explain the concept, here’s a simple example:
Meet Alice (a hypothetical client):
Alice earns more than $500,000 per year and wants to give $10,000 to the community foundation’s nonprofit emergency fund. She owns Apple stock that she bought more than 20 years ago, which has grown significantly in value. She also has plenty of cash.
Alice is considering two options: writing a check for $10,000 or donating $10,000 worth of Apple stock.
Here’s how the numbers break down:
- Alice is in the 37 percent federal income tax bracket and the 23.8 percent federal long-term capital gains tax bracket (which includes the 3.8 percent net investment income tax).
- Let’s say her cost basis in the $10,000 of Apple stock is $2,000.
- If Alice gives cash, she can deduct the full $10,000, saving $3,700 in federal taxes. That makes her net cost $6,300.
- If Alice donates the stock instead, she still gets the $10,000 deduction and saves $3,700 in federal taxes. But she also avoids paying capital gains tax on the $8,000 gain, which saves her an additional $1,904.
- Altogether, donating the stock brings Alice’s net cost down to $4,396.
The result is the same $10,000 gift to charity, but Alice saves significantly more by donating the appreciated stock instead of cash.
This is just one example. Charitable conversations often open the door to even more meaningful planning, including legacy gifts, family involvement, and long-term charitable strategies.
You can reach out to our executive director, Christian Maher, if you ever want to speak about how the community foundation can assist your clients. We have worked with numerous advisors to help generous people to plan millions of dollars in charitable gifts. Integrity is a paramount value in our work. We maintain your client’s trust by keeping our discussions and their plans confidential!
Christian Maher, Executive Director
executive@crawfordheritage.org
814-336-5206