When it comes to charitable giving…cash is not always king

Amy Jordan |

We've all heard the saying "cash is king." Most of the time that is a good rule of thumb. But sometimes cash isn't the best way for your clients to support their philanthropic endeavors.  Below are three instances in which giving assets other than cash might be the best choice:

  • If a client owns highly appreciated assets, such as stock, and the client is also planning to make a significant gift to charity, consider advising the client to give the appreciated assets instead of cash to their donor-advised fund at Hudson Community Foundation (HCF). Clients might not know that assets like appreciated stock can be sold by the charity for 100 cents on the dollar--no capital gains tax applies. That means a client will have more money to support their favorite charitable causes, than if the client had sold that same asset themselves and given the proceeds to a donor-advised or other fund at the community foundation or other charitable organization.

 

  • If a client wants to support several charities all at once but has a single large asset to give, the client can use a donor-advised fund at HCF to facilitate the contributions. The client can transfer the asset to the fund, get the tax benefits, have the asset converted to cash, and then allocate the proceeds to several different charities of choice.

 

  • You and your client can work with the team at Hudson Community Foundation to facilitate a gift of an “alternative” or “complex” asset to the client’s donor-advised fund to maximize tax benefits as well as maximize the dollars available for charitable giving. Closely held stock can be excellent gifts to a fund at HCF.

Frequently, the team at HCF fields questions from professional advisors about philanthropy. We appreciate their questions and are grateful that they are having these discussions with their clients and look to HCF as a resource.   

As you talk with your client about the financial and tax benefits of establishing a DAF or other type of fund at Hudson Community Foundation, keep in mind that the benefits go beyond tax savings and administrative streamlining. What’s especially beneficial for HCF fundholders and donors is the resourcefulness of our experienced staff when they want to learn more about particular causes or create a commitment to a charitable giving plan.

We welcome conversations to help donors give to their favorite causes. Hudson Community Foundation enables simple, smart and meaningful family philanthropy.  Although HCF is itself a public charity, it does not promote any one charitable cause.  Rather, HCF is committed to expanding the capacity of family philanthropy - no matter where you live.

 

Read more about Donors Guide to Donor Advised Funds.

 

With a fund at Hudson Community Foundation (HCF), advisors can manage the charitable assets on their preferred platform at any amount. Assets stay under your management. You can provide your clients with the consistent investment advice they expect. We are your partner in charitable giving!

The team at HCF is a resource as you serve your philanthropic clients. We understand the charitable side and are happy to serve as a secondary source as you manage the primary relationship with your clients. This blog is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.