Keep your eye on clients’ appreciated stock

In August 2022, markets were down 12% for the year, and inflation was up 8.3% year-over-year. Annual charitable giving was on its way to a rare (fourth time in 40 years) year-over year decline of some 4% according to Giving USA. This was due in part to donors not wanting to give stock at depressed values.

As of July 2023, markets were up 7.28% year to date and inflation was roughly half at 4.7% year–over-year. Even though the stock market still shows signs of volatility, hopefully, charitable giving will rebound. 

No matter the times, and even in down markets, some stocks will still out-perform. These holdings are excellent candidates for your clients to give to charity and avoid taxes on capital gains. This year is no different, with stocks like Microsoft, Apple, Nvidia, among others, enjoying banner years. Indeed, Microsoft, Apple and Nvidia were up 38%, 36% and 228%, respectively through mid-August. These gains may have created concentrated stock positions where you, as advisor, may believe that portfolio allocations have become imbalanced under the investment strategy you are pursuing. Clients with donor advised funds (DAFs) at GCF can consider potentially alleviating this situation through charitable gifts of highly appreciated stock.

Clients who give appreciated stock to a DAF at GCF can: 

  • Enjoy the ease of the DAF as an account for current and future charitable giving
  • Conveniently support the causes that they and their families care most about locally, nationally and internationally
  • Rely on the expertise of our staff to help identify local organizations that are working on the issues the client cares about most
  • Benefit from an up-front income tax deduction, avoid capital gains on the assets’ sale within the fund and grow the proceeds tax free for future grantmaking
  • Leave a legacy for children and grandchildren through shared philanthropic values
  • Reduce the value of their taxable estate, potentially reducing estate taxes
  • Enjoy supporting charities in the client’s name, the fund’s name or anonymously
  • Receive invitations throughout the year to educational programs and behind the scenes opportunities to learn about nonprofits alongside like-minded donors
  • Receive a single, year-end tax document that summarizes all gifts for tax purposes 

By establishing a DAF at GCF, your client is part of a community of giving and will have opportunities to collaborate with other donors who share their interests. In addition, your client is supported in strategic grant making, family philanthropy and opportunities to gain deep knowledge about local issues and nonprofits making a difference.

The GCF Difference