A Fee-Free Way to Anonymously Donate Appreciated Assets

When you donate appreciated assets like stocks, ETFs, and mutual funds, you’re giving in a highly tax-efficient way, which is best for both you and the recipients of your charitable giving. Donating assets directly to individual charities, however, can be difficult, especially when dealing with smaller organizations, and good luck doing so anonymously.

One solution is to open a donor advised fund (DAF), but as much as I like these giving vehicles, they generally have various fees to pay and minimums to abide by once you’ve opened an account. It’s a long-term relationship. Charityvest Basic is an ideal solution for simple, no-cost, anonymous giving.

Why Donate Appreciated Assets?

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If your donations add up to hundreds of dollars, you’re most likely taking the standard deduction. If your donations add up to tens of thousands of dollars, you’re most likely itemizing deductions. If you’re not sure whether you’re itemizing deductions or not, take a look at last year’s 1040 and do some quick tax planning for the current year before December 31st.

For itemizers, once your total itemized deductions equal the standard deduction, every dollar donated to qualifying charities will reduce your taxable income by $1, reducing your federal income tax at your marginal tax rate. If you’re in the 32% tax bracket or higher, as many high-income professionals are, you’ll save at least 32 cents in taxes for every dollar donated.

Ideally, you’ll choose the assets that have the largest percentage gain when deciding which of your assets you’d like to part with. If you don’t want to change your asset allocation, I still recommend donating your high-flying stock and replacing it by buying more with cash or cash flows as you see fit, effectively raising your cost basis significantly without changing what you own in your investment portfolio.

When you make a donation in your name, with your address (and possibly your phone number), you will be on that charity’s mailing list and call list for life until you kindly ask that they stop inundating you with requests for more money fortnightly.

Why Donate Anonymously?

Having sent $100 grants to some 500 charities as a part of our Giving Tuesday efforts in recent years, I’ve been careful to select “anonymous” giving each time, but it became apparent that I messed up at least a couple of times. I know because I get newsletters and appeals in the mail quite often from charities that I’ve only given to as requested by readers.

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