A scientific patent? A famous painting? How charities benefit from your ‘unusual’ assets

Feb 26, 2020

You may be surprised at just how many types of assets we can accept—including those that may seem, well, unusual.

Two scientists recently donated intellectual property to us in connection with an agricultural invention. An art collector contributed a painting by a world-renowned artist. And an entrepreneur donated shares of her latest technology venture.

All three of these gifts demonstrate the breadth of the charitable playing field. Each contribution boosted the donor’s giving impact and tax benefits.

Still, these “complex” assets may be underrepresented in the world of philanthropy. As C. Eugene Steuerle and his colleagues at the Washington, D.C.-based Urban Institute suggest, many wealthy individuals may simply not think to consider the full range of their assets as a source for charitable giving.¹

You may be surprised at just how many types of assets we can accept—including those that may seem, well, unusual.

Published Date

Wed, 02/26/2020 - 12:00

Many donors may not think to consider the full range of their nontraditional assets as a source of charitable giving.

A shift in thinking could be good for nonprofits and donors alike

Donating assets that have appreciated in value² often means you won’t be hit with the associated capital gains taxes.³ You may be able to give more to charity as a result—sometimes 20% more.

Contributing assets that you may no longer have a use for can help rebalance, diversify, and strengthen your portfolio. A donation of non-public or closely-held stock in advance of a potential liquidity event, meanwhile, can be a good way to soften the tax consequences of a windfall.

Our most commonly contributed complex assets include private equity, closely-held stock, LLC and limited partnership interests, hedge fund interests, and insurance policies.

Not sure what you might give? Here are some guiding questions as you review your portfolio

Are you considering selling a business or business interest in the near future?
Do you have highly appreciated financial assets that you’re wary of selling for tax reasons?
Does your employer offer a buyback program for company stock?
Do you have insurance policies you no longer need?
Do you have a vacation property or second home you’re thinking of selling?

Want to learn more? Visit our complex assets page to see how our process works. Give us a call if you want to consult about a specific asset.

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Footnotes

¹Steuerle et al., “Patterns of Giving by the Wealthy.” https://www.urban.org/sites/default/files/publication/99018/patterns_of_giving_by_the_wealthy_2.pdf
²Assets must be held for longer than one year.

³The recipient of a gift (e.g., the charity) recognizes any built-in gains when it sells the asset. Being tax-exempt, the charity generally does not experience any negative income-tax consequences.

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