Five Tips for Donating Appreciated Assets

Steve Lear |

It may seem counterintuitive to say that a sound financial strategy is to give money away. However, there are tax-saving tactics and strategies that people around the country can implement when thinking about donating appreciated assets. It's one of the many reasons why you should speak to a reliable financial planner before thinking about major contributions to charity. 

The truth is that many donors have significant concerns about the donation process, what it entails, and how to navigate charitable giving without compromising your finances. We're here to help provide some clarification. 

Let's look at a few tips for developing beneficial giving habits. 


How to Better Your Charitable Giving 


1. Narrow Your Scope 

While you may have other's best interests at heart when giving away to charity, it can be difficult to juggle multiple causes without significant capital or assets to disperse. One way to help narrow your charitable contributions is by creating your own personal or family mission statement. Answer these questions:

  • What are you passionate about?
  • Were there charities or volunteer work that has influenced you in the past? 
  • What are your family values? 
  • What type of impact are you looking to make? 

Taking the time to mull over these questions can help narrow your scope and place certain charities in the running for where you want to contribute. There's no shame in focusing on what you care about most and who you believe could benefit from your donations. 


2. Speak With a Financial Planner 

Perhaps the most important tip we can give for donating appreciated assets is speaking with a financial advisor regarding charitable giving. 

Not only can a financial planner help with budgeting and allocating your donations, but they can also offer tax savings strategies that you can take advantage of when making charitable donations. 

A financial advisor can be certain that your goals are considered and your objectives are in the line of sight of your donations. Their goal would be to help you paint a clearer picture of which strategies and charitable implementations make the most sense. 



3. Appreciated Assets Equal Charitable Dollars 

One of the many ways a financial advisor can help you work toward your charitable goals is by assisting with appreciated asset donations. You can donate appreciated assets such as stocks and bonds to charities. This is a way to avoid capital gains taxes on stock appreciations and provides you with two incredible benefits. 

  1. Increase your donation amount
  2. Decrease your exposure to taxes 

Another way to incorporate appreciated assets into your charitable giving portfolio is through donor-advised funds. You can think of this fund as a charitable investment account that allows you to contribute securities, cash, and other appreciated assets and become immediately eligible for tax deductions. These funds can later be invested for tax-free maturity — while you have the freedom to recommend grants you care about to IRS-qualified charitable organizations. 


4. Automate Your Charitable Contributions 

If you have a figure in mind that you would like to contribute every year, that's great! It's always a good idea to sit down at the beginning of every fiscal year and determine just how much you wish to donate. You can always speak with a reputable financial planner to see what is feasible and realistic as well. Either way, once it's time to contribute, there's one way that you can make it a seamless process. The keyword here is automation.

You already pre-schedule many of your billing payments — so why not do the same with donations? Not only will this ensure that you're hitting a charity goal, but it also assists with planning the rest of your budget with a clear-cut picture of how much will be taken out month by month. You can set up automated donations from a credit card or checking account — or you can even speak with an employer about having donations deducted from payroll. 

Don't struggle at the end of the year to get all of your donations in — automate them instead. 


5. Research Your Ideal Charities 

One area of charitable giving that not many people want to focus on is the trustworthiness factor. It can be unsettling to think that a charity may not be using donated funds in a way that aligns with its donors, but it does happen. We recommend researching your favorite charities to determine whether or not they're on par with your values. 

Whether through newsletters, emails, pamphlets, online resources, or by contacting the charity directly — some investigation is certainly worth doing. There are also highly trusted independent resources available from organizations like GuideStar or reports from Charity Navigator that can shed some light on your desired charities. 


Start Your Charitable Giving Journey Today 

It's never too early or too late to begin thinking about a charitable giving strategy. Similarly, now is the perfect time to begin teaching young ones about the power of charitable giving by getting them involved with organizations you're passionate about — along with what excites them as well. 

If you're ready to start taking your charitable giving journey to the next level, contact Affiance Financial today to speak with one of our dedicated financial planners. 


There can be no assurance that the content made reference to directly or indirectly in this blog post will be suitable for your individual situation, or prove successful. Due to various factors, including changing conditions and/or applicable laws, the content is only reflective of current opinions or positions and is subject to change at any time and without notice. Moreover, you should not assume that any information contained in this blog post serves as the receipt of, or as a substitute for, personalized investment advice from Affiance Financial. Please remember to contact Affiance Financial if there are any changes in your personal/financial situation or investment objectives.