Don’t Stop Asking For Gifts of Stock, Even in This Economy, Expert Says

Many fund raisers have predicted a sharp drop in gifts of appreciated stock in the final months of this year, because investments have plunged in value in the ongoing financial crisis, and donors are nervous about their losses.

But Robert F. Sharpe, a Memphis planned-giving consultant, argues that — while fewer stock gifts are all but certain — donating appreciated securities is still advantageous for many people, and fund raisers should keep promoting those gifts among certain types of donors.

Donors in their 60s and older, for example, he writes, “have seen the value of securities fall in recent months but still enjoy substantial gains.”

At one point this month, he notes, the Dow Jones Industrial Average closed at nearly the level that would have provided stockholders who own those securities with a 9-percent annual return over the past 25 years.

Donors who hold stocks that long may not be earning much income from them, he continues, so they might want to use their stock to create gift annuities or other types of donations that provide donors with a steady amount of income, which donors may find reassuring in the current economy.

Meanwhile, other donors will find it beneficial to donate long-held securities instead of cash, and then use their cash to buy other stocks at the low rates of today’s market.