We've all heard the saying "cash is king." Most of the time that's a fantastic rule of thumb. But sometimes cash isn't the best way to support your philanthropic endeavors. How can you tell? Here are three clues to keep you on the lookout for opportunities to get more bang for your giving back bucks.
1. If you're holding highly appreciated assets, such as stock or real estate, and you are also planning to make a significant gift to charity, consider giving the appreciated assets instead of cash. Why is that? Because assets like appreciated stock can be sold by the charity for 100 cents on the dollar--no capital gains tax applies. That means the charity ends up with more money to work with than you would if you sold that same asset yourself.
2. If you want to support several charities all at once but have a single large asset you plan to give to the charities, consider using a vehicle called a donor-advised fund to facilitate the contributions. You can transfer the asset to the fund, get the tax benefits, have the asset converted to cash, and then allocate the proceeds to several different charities of your choice.
3. Think outside the box, too. Giving something other than cash means contributing any asset you have that it is highly appreciated. Sometimes even artwork, jewelry, antiques, limited edition books, and other collections can be contributed to your donor-advised fund.
And, before you get worried it's too complicated, remember, giving anything to charity is worthwhile. Whether you are contributing stock, real estate, books, or even canned food from your pantry, it's all good! Every gift makes a difference to the nearly 1.6 million charities in the United States that are raising money to support their missions.