A new year brings new opportunities to enhance and expand our recreation program. One project is the expansion of our Therapeutic Arts and Crafts Program, thanks to the Horton Family Endowment for the Arts. This endowment honors Sherri Lippman’s parents, Henie and Roy Horton, who were very active in the art community. Sherri, who obviously inherited her parents’ love for the arts, is currently working in a special capacity at the Metropolitan Museum of Art in New York City.
Donors waiting for just the right time to donate their stocks to charity will be waiting a long time and instead should focus on a longer-term “investor” approach to giving, according to a recent press release from TD Waterhouse.
“If you’re trying to wait out current volatile conditions in order to maximize the value of your stock donation, I would say that your heart is in the right place, but your strategy is wrong,” says Jo-Anne Ryan, Vice President, Philanthropic Advisory Service, TD Waterhouse Canada Inc.
Instead, Ryan recommends adopting a personal giving strategy as part of a long-term plan that should include contingencies for market volatility. Donors should take a ‘dollar cost averaging’ approach that spreads donations over a period of time in a disciplined manner, applying the same approach to giving as you would to investing. This reduces the pitfalls of poor market timing and addressing the charities’ need for stable funding.
Ryan offers the following tips to donors seeking to maximize the impact of their donated securities:
- If you are holding an investment because you believe it still has upside potential, consider donating the security and then re-purchasing it. By doing so you avoid paying capital gains tax on profits to-date, and get a tax credit for the donation. This “steps-up” the adjusted cost base of the investment, reducing capital gains when you eventually sell.
- Consider triggering a capital loss by selling underperformers, and donating the cash proceeds to charity. This strategy produces a tax credit for the donation and a capital loss that can be used to offset gains.
- If you are still feeling uneasy about donating stock in light of current market conditions, consider a cash donation, triggering a charitable deduction.
“The bottom line,” concludes Ryan, “is that neither your investments nor your charitable endeavors need to be held hostage by the market. By taking a strategic approach to giving, you’ll maximize your tax savings and the value of your donation over the long term.”
For further information regarding making a gift to the Jewish Home Foundation, contact Melanie Cohen, CFRE at 201-750-4231.
(Information included in this article is not intended to serve as investment or tax advice. Donors should contact their financial advisors.)