Thinking about your year-end charitable giving?

Think beyond cash! Consider this: one of the most mutually beneficial and tax-smart ways to support a qualified charity, like Drexel University, is to give shares of appreciated stock or mutual funds instead of cash. You can deduct the shares' current fair market value as a charitable gift and also avoid paying tax on the capital gain. Drexel will sell the shares and use the funds to support whatever program or department that you designate.

Why giving stock is better than giving cash:

Here’s an example: You have 200 shares of XYZ stock that is currently worth $50 per share ($10,000) and you paid only $10 per share ($2,000) when you purchased it 10 years ago – an $8,000 gain.

• If you sell the stock and then donate the proceeds to a qualified charity, like Drexel University, you’ll pay capital gains tax on the difference between what you paid for the stock and its current value. Capital gains rates on assets held for more than one year can be as much as 20 percent (depending upon your taxable income and filing status), with the average being 15 percent. If the 15 percent rate applies to you, you'll pay $1,200 in capital gains tax, leaving you $8,800 to contribute to Drexel.
• If you donate the shares directly to Drexel University, you’ll have no capital gains tax due, you’ll qualify for an income tax deduction for the full current value amount of $10,000 and Drexel will receive the full $10,000.

There are a few rules to remember:

• You must have owned the stock or mutual funds for more than a year. Otherwise, you only get to deduct the basis, not the current fair market value.
• The value of your contribution will be the average of the high and low prices for publicly held securities on the day of transfer to Drexel.
• The deduction for donations to qualified charities is limited to 30 percent of your adjusted gross income. This differs from a 60 percent limit for donations of cash, but you can still give mixed donations (cash and appreciated assets) to maximize your deduction. The amount that you can’t use in the current year can be carried forward to be used in future years.

Questions? Contact David Toll, senior associate vice president for gift planning, at 215.895.1882 or giftplanning@drexel.edu.