A charitable contribution of appreciated securities such as stocks, bonds, or mutual funds is one of the most tax-efficient of all ways to support our mission!
DONATING STOCKS, BONDS, AND/OR APPRECIATED ASSETS
Consider donating appreciated securities to Cradles to Crayons. By taking advantage of the applicable tax incentives, you can significantly increase the funds available to you for charitable giving.
• You pay no capital gains tax on the securities you donate.
• You receive a charitable deduction for your full donation.
• You can direct your gift to a specific initiative or for a specific purpose.
• We recommend transferring your appreciated securities directly to Cradles to Crayons rather than selling them and donating the proceeds. Your sale will be subject to capital gains tax, causing you to lose a key tax benefit of this gift type.
• Consider the following example from Motley Fool which illustrates this concept:
Tom and Jerry are brothers, and each wants to make a charitable contribution to his favorite charity. Tom wants to donate to his college alma mater, while Jerry wants to give to his church.
Tom and Jerry each purchased shares in XYZ Corp. back in April 1996 at a cost of $5,000. Tom and Jerry’s investments now have a fair market value of $20,000 each.
In order to make his charitable contribution, Tom decides to sell his shares in XYZ Corp. and realizes a gain of $15,000 on those shares. Tom now must pay $3,000 in federal taxes on this $15,000 gain (20% capital gains rate). Tom then takes the remainder of these funds in the amount of $17,000 and writes a check to his alma mater for this amount. Assuming that Tom is in the 28% tax bracket, Tom will realize a tax savings of $4,760 on the charitable contribution deduction of $17,000.
Jerry, on the other hand, has made arrangements with his church to donate his shares of XYZ Corp. directly to the church. After the transfer, Jerry will NOT realize any gain or need to pay any tax on the $20,000 transfer of the stock to his church. In addition, Jerry will receive a charitable contribution for the full $20,000 fair market value of the stock. And, assuming that Jerry is also in the 28% tax bracket, this $20,000 charitable contribution deduction will generate tax savings of $5,600 to Jerry.
• Cradles to Crayons is not required to pay taxes on your donation. When donors give appreciated securities directly to Cradles to Crayons, we receive the full value of that security. By first selling the security and then donating the proceeds, Cradles to Crayons receives the value of the security less the capital gains tax.
How to transfer securities
• Consult your financial advisor first as this type of gift must be handled through a Donor Advised Fund. Then let Cradles to Crayons know the gift is coming and where you would like to direct it.
• Cradles to Crayons’ account information is provided below for the purpose of transferring stocks and assets.
Giving Through Wire Transfer
You or your stock broker can transfer all DTC eligible securities to:
C2C Merrill Edge account info:
Cradles to Crayons account number: 5F4-86295
*For any questions, you can also contact Merrill Edge customer service team at 877-653-4732.
*Electronic transfers are made without identifying the donor. Please be sure to notify John Haak in Cradles to Crayons Development Office at 617-779-4723 or firstname.lastname@example.org so we can identify and credit your gift when the transfer is made.
Giving Stocks in Certificate Form
Mail your unendorsed certificate(s) to the Cradles to Crayons Development Office with a letter stating the stock name, number of shares and your intention to donate them. In a separate envelope, send a copy of your letter with a signed Stock Power form for each stock. Leave all other sections of the Stock Power form blank. Mail these items separately from the certificates to the Development Office at the address below:
Attn: John Haak
Cradles to Crayons
155 North Beacon Street
Brighton, MA 02135