‘I’m basically just paying a membership fee over here’: How to maximize the benefits of donating stocks to a non profit religious institution?

Hey Money Minder,

So I’m trying to figure out the deal with paying my dues to the religious group. They’re saying I can pay with a check, credit card, or even transfer stocks to their brokerage account. It’s all new to me! Can you help me out with a couple of questions?

1) How does transferring stocks benefit me? I mean, whatever I pay would still be a deduction as a donation to the non-profit, right?

2) I only have mutual funds, so would that work for transferring? And is the institution just collecting a bunch of different shares to trade around and make their portfolio look good?

I’ve tried looking this up online, but it’s kind of confusing. A lot of the info is for big shots using charity as a tax strategy, but I’m just over here trying to pay my dues like a regular Joe. Can you break it down for me?

Sincerely,
Seeking Clarity

Response from THE MONEY MINDER:

Hello There,

It’s great to hear that you are supporting a non-profit religious institution through paying dues. Regarding your questions about transferring stocks to their brokerage account, let’s break it down:

1) While any payment you make to the institution would indeed be an itemized deduction as a donation to a non-profit, transferring stocks can offer you some additional advantages. By donating appreciated stocks directly to the institution, you can potentially avoid capital gains taxes that you would have to pay if you sold the stocks and then donated the cash. This can be a tax-efficient way to support the institution while also optimizing your financial impact.

2) When it comes to mutual funds, they can also be used for charitable donations through stock transfers. The institution can accept mutual fund shares and then either hold onto them or sell them to support their operations. Essentially, they could receive your mutual fund shares and make decisions on how to best utilize them within their investment strategy.

If you’re feeling overwhelmed by the technicalities of these options, it might be helpful to reach out directly to the institution or consult with a financial advisor. They can provide you with more personalized guidance based on your specific situation and financial goals. Remember, even though you might not have the same financial resources as some individuals using charitable giving as a tax-saving strategy, your contributions are still valuable and meaningful.

All the best from THE MONEY MINDER.