To make a gift of stock, securities, or property, please call Robbie Smith at 904-757-7918
for specific
instructions. DONOR INFORMATION
(The following article reprinted from The Florida Times Union, September 21, 1997) by Amy
Baldwin Knight-Tribune News Service
Lexington, KY. - Retired dentist Thomas Cooper puts stock in his church.
Literally. When Cooper gives to Centenary, a United Methodist congregation, he
does it by signing the back of an appreciated stock certificate. The church gets a
nice donation, bigger than if Cooper, 66, cashed in his long-term stock and paid capital
gains taxes on it before making his donation. Cooper also gets to deduct his
contributions-the appreciated value of the stock, not just what he paid for it-from his
taxable income. "It makes a nice gift, and it is an easy way for the church to
profit," said Cooper, a professor emeritus at the University of Kentucky.
"It also is very handy when I have little pieces of stock in different
companies. It saves me the trouble of selling all those little things. I just
give them away and get a deduction."
Cooper has been contributing appreciated stock to Centenary off and on for 25
years, more frequently now, he said. The capital gains tax law passed by Congress in
July means stock donors like Cooper who want to avoid paying the tax must hang onto their
securities for 18 months-instead of one year-before giving them to charity. The capital
gains tax donors will dodge when they donate securities isn't as great as it was before
July. Congress lowered the tax from 28 percent to 20 percent. But financial
planners said they don't expect that a 28.67 percent decrease in the tax benefit will
deter people from giving stock or mutual-fund holdings to charity. After all, doing
so means avoiding the capital gains tax entirely.
When Centenary gets stock from Cooper or other church members, the church sells
it the same day, said Ward Wilson, associate pastor. "We are not in a position
to make or lose money on a stock transaction," Wilson said. In addition to his
dentistry background, Cooper also is a certified financial planner. He started
taking finance classes in 1984 so he could teach his students how to handle the finances
of their future dental practices and how to prepare for their retirement, Cooper
said. He was certified in 1988. "One reason it is so convenient to give
stocks is there is no question in establishing value on it," Cooper said. If
you donate a piece of antique furniture to charity, you will jump through more hoops, such
as getting three or more appraisals to determine the piece's value, Cooper said.
It's not difficult to pick which stock to donate, he said. "You (should)
routine give the one (stock holding) that has increased in value the most," Cooper
said. The reason, he said, is simply to take advantage of a bigger income tax
reduction.
Stocks Cooper has donated to Centenary include First Union Corp., Tenneco and
Louisiana Pacific. Lexington financial planner George Pierce said more often these
days he is recommending clients give stocks to charities. That's because a strong
bull market, which saw the Dow top 8,000for the first time in July, means "people
have more appreciate now," he said. Pierce advises donors who are about to
retire to give several year's worth of stock donations before retirement. For
example, if you typically give $1,000 worth of stock or mutual-fund donations to a
particular charity, you should give $3,000 or three years' worth of contributions, just
before you retire. That way you get to claim the income tax deduction while in a
higher income bracket. The charity still gets its money. The idea is you get a
better tax benefit if you give to charity while you are working and in the 36 percent
income tax bracket. When you retire, you might expect to drop to the 28 or 15
percent bracket. "It's all part of the strategic (financial) planning
process," Pierce said.
Regular donors should notify their charities if they plan to contribute several
years' worth of donations in one lump sum,, Pierce said, so the charity can plan and
budget for that. Lowell Krandell is one of Pierce's clients who took the financial
planner's advice and gave GTE stock to his college. Krandell, a 60 year GTE engineer
who is now retired, twice has given $400 worth of GTE stock to the Indiana Institute of
Technology in Fort Wayne. "That's what I normally contribute to the college
each year." Krandell said. But the college got more than $400 each time because
of GTE's matching funds program, Krandell said. GTE matched Krandell's donation and
doubled the first $200 bringing each contribution to $1,000. Krandell, who recently
moved from Lexington to Estes Park Colo., would donate stock again. "Well,
if I had any more GTE stock (I would)," he said. Universities are popular
recipients for those wanting to donate appreciated assets, officials at Eastern Kentucky
University said.
"We do encourage donors to make tax-wise gifts-gifts that will benefit the
university and help the individuals themselves," said Don Feltner, vice president of
university relations and development for Eastern. One donor's stock contribution
soon will land Eastern its first endowed chair, which is a post for an expert professor
recognized for work in a particular discipline, Feltner said. This spot will be in
insurance studies. The price tag on an endowed chair at Eastern is $1 million.
Eighty percent of the earnings on that money will go to fund the position, expenses for
which include such items as a professor's salary, research and equipment, Feltner
said.
"We have more and more people give us stock now rather than the dollar
gift," said Bill Abney, director of development for Eastern. In an effort to
remind donors and potential donors of the benefits of donating stocks, mutual funds and
other investments, Eastern sens a quarterly newsletter to about 7,000 alumni, Feltner
said. Included is a return care on which a donor can request more information on
certain kinds of gifts, such as stocks. Another Lexington financial planner has
advised his clients s of this tax strategy for years and gives stock to charities
himself. "There is no downside I see to it," said Ralph Scearce, president
of Cambridge Financial Inc. Scearce would not disclose which charities benefit from
his stock donations. He, like many donors, ask the charities not to release his name
or information on his contributions. "Most any charity would be glad to have
it," Scearce said.
WHAT TO DO BEFORE DONATING
Here are some tips from Lexington Ky, financial planner George Pierce on donating mutual
fund holdings or stock to charity: Mutual fund gifts:
To accept your donation, your charity must have an account at your mutual fund
company.
If you know the charity doesn't have an account, send the charity a letter
explaining the donation you'd like to make.
Enclose an application for an account with the mutual fund company, which you can
obtain from the company. Ask the charity to send completed application back to you.
Send a letter to your mutual fund company explaining what you'd like to donate to
the charity. Enclosed the charity's application and your latest account
statement.
GIFTS OF STOCK:
If you have a stock certificate for the precise amount you'd like to give,
you can sign the back of it and hand it to your pastor (or Charity Executive Director).
If your charity is a long distance one, you don't want to send a signed stock
certificate through the mail. Get a letter of authorization from your brokerage
firm.
Send the unsigned stock certificate and letter of authorization in separate
envelopes to the charity along with letters explaining the donation.
Suppose you have a 100 share stock certificate but you ant to donate just 50
shares. Contact your brokerage firm and arrange to turn in the larger stock
certificate for several smaller ones.
If you have any questions about donating stock to Safe Harbor please call our
office: 904 757-7918
