Should you be in a position to be generous with what you have, give thought to whom you give and also how you give. Any gift to a charity should be given proper consideration as to how that gift is completed.
Let’s look at charitable giving. You know you want to give, but where will your gift have the most impact. First I suggest you look at what is truly of interest to you. What issues have influenced you? Health, education and the arts are some suggestions. Once you zero in on an area you want to have an impact on, do some homework. Not all non-profits are good stewards of money. Check out potential benefactors on web sites like Charity Navigator (http://www.charitynavigator.org/) and Guidstar (http://www.guidstar.org/) These can give guidance as to how much of your gift goes to administrative and how goes to the cause.
Once you are satisfied with the organizations credentials, examine how you want give. Cash may not be the best option. Perhaps you have a significant amount of stock that has greatly appreciated over the years. Especially in the case where the stock represents a high concentration in your portfolio, a gift of stock may be the better gift than cash. Let’s say you want to gift $20,000 to a charity. Instead of cash, you give $20,000 in stock. Now assume your cost basis in that stock is $10,000. If you sold the stock to make your gift, you would pay taxes on the $10,000 capital gain. In the case where the same value in stock is donated, you don’t pay the capital gain and still get the full value deduction. Many nonprofits can facilitate this type of gift.
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