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Donating Investments

If you have investments such as stocks, mutual fund shares, or other securities, they may have increased in value over time. If you sell those investments to donate to charity, you will need to pay tax on the increase in value, and this will decrease the amount you can donate and perhaps the amount you can deduct on taxes. If you donate those assets to charity directly, you will not have to pay tax and you may have a tax deduction. 

You may donate investments to Portland Friends of the Dhamma using a Donor Advised Fund (DAF).

  1.  Create a DAF in 15 minutes with a charitable arm of a brokerage or organization (Table 1). 
  2. Make an irrevocable donation of your investments to the fund and receive tax benefits in that tax year on the full amount and avoid paying any capital gains tax (Table 2).
  3. Choose how your fund will be invested so it will grow over time.
  4. When you are ready to give money, recommend a grant from your fund to PFoD. Your grant recommendation will be reviewed, and, because PFoD is a 501(c)(3), your fundÕs donation will be approved and sent within days. 
  5. You can then set up automatic monthly recurring grants. The money remaining in your fund remains invested. You may continue to donate investments to the fund over time to make more grants.

Table 1. A Sample of Donor Advised Fund Resources 

Charitable Organization
Web Address Donation Minimum  Notes
Fidelity Charitable www.fidelitycharitable.org $5,000 Apply online to open your fund. To donate investments  call 1-800-262-6039 
Oregon Community  Foundation www.oregoncf.org $25,000 (may give  $5,000 and build over  time to $25,000) May donate only to  organizations in  Oregon. 
Schwab Charitable www.schwabcharitable.org $5,000 Apply online or on  paper. 1-800-746-6216,  ask@schwabcharitable.  org
Vanguard Charitable www.vanguardcharitable.org $25,000 Apply online to open  your fund.

Table 2. Tax Advantages to Donating Investments purchased for $5,000 now worth $55,000

(From Schwab Charitable April 2019)

Hypothetical example (assuming investment has been held for more than a year)

Sell stock and donate net proceeds (cash) to charity Donate stock to Schwab Charitable donor-advised fund account
Current fair market value of securities 1,000 shares @ $55 per share = $55,000 1,000 shares @ $55 per share = $55,000
Federal long-term capital gains tax (20%)2 Assumes a cost basis of $5,000 and long-term capital gains tax of $50,000 $10,000 paid $10,000 avoided
Charitable contribution/charitable deduction2 $45,000 $55,000
Value of charitable deduction Assumes donor is in the 39.6% federal income tax bracket $16,650 $20,350
Total donor tax savings less capital gains tax paid $6,650 $20,350

Assumes cost basis of $5,000, that the investment has been held for more than a year, and that all realized gains are subject to a 20% federal long-term capital gains tax rate. Does not take into account any state or local taxes, or potential Medicare surtax resulting from net investment income.

Availability of certain federal income tax deductions may depend on whether you itemize deductions. Charitable contributions of capital gains property held for more than one year are usually deductible at fair market values. Deductions for capital gains property held for one year or less are usually limited to cost basis.

The example is hypothetical and provided for illustrative purposes only. It is not intended to represent a specific investment product.

Thank you for considering Portland Friends of the Dhamma in your charitable giving. Anumodana!

If you have questions, contact Gregory Satir, Development committee Chair at gsatir@pdxdhamma.org or (503)233-6498. 

Portland Friends of the Dhamma is a 501(c)(3) religious nonprofit with federal tax ID #20-8808159 and state tax ID #123233-90.