• Anonymous donor

    It was at a Fraser Institute Foundation donor stewardship event in the summer of 2012, while listening to an explanation of why the Planned Giving program is so important to the long-term future of the Institute, that a loyal donor realized making a current-day planned gift was the answer to challenges he was going to have with his taxes that year. Having sold some land, he was looking for an offset.

    During a subsequent visit with Linda Ashton, the Fraser Institute’s gift planner, it was suggested and agreed that the donor, who wishes to remain anonymous, would establish an endowed fund with the Foundation to which he could add over time and ultimately, by a bequest in his will. His next decision was to determine how he was going to “pay” for his gift and his financial advisor offered the solution—publicly-traded securities. Knowing that the donor owned stocks that had increased in value over the years, and recognizing the tax benefits to be had by donating them to a charity, the advisor recommended this approach to his client.

    A few months later, when year-end was fast approaching, the Foundation sent the advisor a Charitable Donation of Securities In-Kind form, the stock was transferred to the Foundation’s broker, evaluated on the date of receipt, and then sold. The donor and the Foundation ironed out the terms of the Endowment, a receipt was issued, giving the donor the tax relief he desired, and now he can enjoy seeing his gift provide annual support for a student education program at the Fraser Institute.

    Individuals donating publicly-traded shares, mutual funds, or government bonds to a charitable organization or private foundation receive a tax credit for the fair market value of the security on the date of the donation. Since May 1, 2006, there is no tax payable on the capital gains resulting from the disposition arising upon the donation of publicly-traded securities.

    Similar rules apply to publicly-traded shares acquired through an employee stock option, with added benefits if donated within 30 days of acquisition. Timing can be crucial, so before proceeding with such a donation, contact your advisor. Doing so is especially important for donations of flow-through shares, since the tax rules relating to them changed substantially on March 21, 2011.