Many of the digital boom’s new high-tech elite have low-tech charitable giving methods — and don’t realize the benefits of donating stock over cash, BusinessWeek reports.
When he suggests stock donations to Silicon Valley’s newly rich, Kevin Fong of the Mayfield Fund told the magazine, potential donors often respond with surprise and curiosity.
“It’s amazing, when you talk to these people, that many of them are not that sophisticated when it comes to their own finances,” he said.
Potential donors often don’t know that strategic stock donations support two good causes: the greater good and the donor’s taxes and estate planning, the magazine says.
Donors of stock can take a tax deduction on the full fair-market value of the stock gift the day they transfer it – adding charitable value to stock that was purchased at rock-bottom prices.
Donors also can contribute restricted stock – shares held by initial public offering insiders – which can be valued by an independent appraiser.
Some words of caution to potential donors of stock: Don’t wait until the end of the calendar year to donate your stock, since it might not transfer in time for current tax-year benefits.
Know the IRS limits: The IRS allows donations of up to 30 percent of adjusted gross income for a current valuation.
And be sure to ask your charity beneficiary for an acknowledgement letter for the IRS.