Planning Ahead: Making Stock Gifts

By Anita Sanborn

Timely Ideas for Giving

Now is the perfect time to start thinking about giving end-of-year stock gifts. The season of Thanksgiving and Advent creates a desire in us all to give a little extra, and transferring stock offers the perfect means to give.
Making a gift of stock is an easy way to give appreciated assets to a ministry that you are passionate about, a capital campaign, or a diocesan institution. It is also a simple way to fulfill your annual pledge to your church.

Colorado Episcopal Foundation provides this service for Episcopalians wishing to donate stock to their church or diocesan institution at no cost. The process couldn’t be easier. The donor requests the transfer of stock through their broker, the Foundation completes the transaction, and your church or diocesan institution receives a check in the mail. The donor then receives a confirmation of the transaction and a donor acknowledgment letter.

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Adam and Eve’s Stock

If you are planning to make a contribution to your church or diocesan institution before the end of the year, consider donating appreciated stock from your investment portfolio. Your tax benefits from the donation can be increased, and the organization will receive more money from the gift than if you gave cash.

Let’s look at an example: Adam and Eve each want to make a charitable contribution in 2016 to their favorite diocesan institution, St. Francis Center. Both Adam and Eve purchased shares in Garden of Eden Corp. back in April 1996 for $5,000 each. Twenty years later, Adam and Eve’s investments now have a fair market value of $20,000 each.

In order to make his charitable contribution, Adam decides to sell his shares in Garden of Eden Corp. and realizes a gain of $15,000. Adam now has to pay $2,250 in federal taxes on this $15,000 gain (assuming a 15% tax rate). Adam then writes a check for $17,750 to St. Francis Center.

Eve has meanwhile made arrangements to donate her shares of Garden of Eden Corp. directly to her church, using Colorado Episcopal Foundation to handle the transaction free of charge. After the transfer, Eve will not have to realize any gain or pay any tax on the $20,000 transfer of the stock to her church. The church will receive the full $20,000 — $2,250 more than Adam’s contribution. In addition, Eve will receive a charitable contribution deduction for the full $20,000 fair market value of the stock, whereas Adam will receive a deduction only for his charitable contribution of $17,750.

There are a few forbidden fruits. This example will not work if the stock has not been held for more than a year. Also, if a stock has decreased in value, donors should generally be advised to sell the securities themselves so they may be able to claim all or a portion of the loss for tax purposes before donating the proceeds.

The Benefits of Making Stock Gifts

Rob and Joan Polete have been active and faithful members of Good Shepherd Episcopal Church in Centennial for over 17 years. Rob has served as Senior Warden of the Vestry, as Chair of the Finance Committee, and has also served on the Stewardship Committee and the Capital Campaign Committee. Joan has been the lead organizer for many parish events and coordinated the kitchen angels for many years. Rob teaches business at John F. Kennedy High School in Denver and he knows how to get the most from his financial assets.

This is why the Poletes have donated gifts of appreciated stock to make pledges to both capital campaigns and annual giving to Good Shepherd Episcopal Church.

In a brief question-and-answer exchange, this is what Rob had to say:

Q. Why is a gift of stock something that you have done regularly to support your church?

A. Gifts of stock enable me to give more than I would be able to by giving cash. The stock gift enables me to eliminate capital gains in my stock portfolio, saving money on taxes I would have paid in capital gains tax, and incorporate them into my gift to the church.

Q. Are there specific benefits that appeal to you?

A. Avoiding the capital gains tax on my gift allows me to donate more money to the church while also being able to claim the full realized value of the stock gift as a deduction on my federal tax return, again saving money on income taxes.

Q. Do you use stock for both annual pledge and special campaigns?

A. I have used stock for both my annual pledge and the capital campaign.

Q. Any comments you might offer to others considering this way of giving?

A. Don’t wait until late December to start a stock gift transaction. You want to give sufficient time for your broker to get information to the Foundation in time to process your gift in the year you are planning on taking the tax deduction.

Q. How did you first hear about using stock to make financial gifts to the church?

A. I first heard of the stock gift program when I served on Good Shepherd Episcopal Church’s capital campaign planning committee in 2010. I have been doing it ever since.

Who We Are

In 1983, a small group of leaders incorporated the Colorado Episcopal Foundation to provide special financial support for the work of The Episcopal Church in Colorado. In 1986, the Standing Committee designated the Foundation to receive and steward funds from the Colorado Trust, which named The Episcopal Church in Colorado as a beneficiary. Entrusting the annual stream of funding for the long-term benefit of the church was a visionary step. For more than three decades, dedicated lay and clergy trustees, with expertise in finance, investments, real estate, law, business management, and stewardship have provided strategic and policy guidance.

The Mission of the Colorado Episcopal Foundation (COEF) is to maximize the long-term financial resources of congregations and individuals in The Episcopal Church in Colorado in order to build church capacity for mission and ministry. This is done through programs and initiatives that address personal finance, congregational finance, and corporate finance based on our underlying theology of stewardship.

Now in our 32nd year of service, the Foundation supports Episcopal congregations and institutions to be financially stable so that vital ministries can be sustained. In 2015, the Colorado Episcopal Foundation handled $1,577,000 in stock gifts to benefit congregations across Colorado. Stock gifts processed by the Foundation continue to grow year-over-year and offer our Churches support in ministry, capital campaigns, and special giving.

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