Stock markets are at record highs

Why a gift of appreciated securities could be right for you, right now

Bubbles are a great thing when my kids are taking a bath… but NOT when we are talking about investments and where we think things stand in the current economic cycle.  As the old saying goes, “you can’t time the market,” but it certainly doesn’t hurt to take some chips off the table while the bulls are still running on Wall Street.

As of the writing of this post, the Dow Jones Industrial Average (DJIA) is up over 120% from its post-crash low of March 2009.  A number of record highs have been hit in 2014… but the bears are growling as well.

Take a look at this chart from Yahoo Finance showing the DJIA from March 21, 2008 to July 21, 2014.

Now may be a great time to consider making a gift of appreciated securities (that you have owned for at least one year) to support Duke University or other charities.  Your income tax deduction will be based on the fair market value of those assets and you avoid taxes on the capital gains.  Because Duke is a tax exempt charitable organization, the university is not subject to capital gains taxes and the full value of your gift will be available for use at Duke!

Here are a couple of our favorite ways to make a gift of appreciated securities:

1) An outright gift of appreciated stocks, bonds, or mutual funds – you can make a tax-wise charitable gift now, receive a 100% deduction for the current value and NEVER have to pay tax on your capital gains! Contact the Office of Alumni and Development Records to arrange a stock transfer to Duke.

2) Use your appreciated securities to establish a life income gift – a charitable remainder unitrust  or charitable gift annuity – for yourself or a loved one.  These special charitable trusts and annuities may fit seamlessly into your personal and philanthropic plans.  Capital gains taxes can be reduced or avoided, income can be taken immediate or deferred (e.g. until retirement), and you would still receive an income tax deduction based on the current value of the donated securities. 

Be sure to read these recent articles on charitable remainder unitrusts and gifts of appreciated stock:

A Golden Age for Charitable Remainder Unitrusts? and Encouraging Stock Gifts – The Sharpe Group

Donors Often Overlook Benefits of Giving Appreciated Stock – Chronicle of Philanthropy

When to Use Charitable Remainder Trusts – Financial Planning

If you have questions and want to talk, just contact Duke’s Gift Planning Office. 

TAGS: Charitable Giving Strategies charitable gift annuities charitable remainder trusts gifts of securities gifts of stock

About the author

Phillip Buchanan

Phil is a veteran of development and gift planning who considers it a privilege to help good people celebrate the joy of giving. He served as Duke’s senior philanthropic counsel until his retirement in April 2021 and helped donors, professional advisors and Duke Development officers evaluate the best options for making a charitable gift to Duke. He has been featured in publications such as BusinessWeek  and Kiplinger’s.