Beyond Cash: Expanding the Conversation Around Charitable Giving
Many clients assume charitable giving means writing a check.
For some donors, cash is simple and appropriate. But for others, cash may not be the most tax-efficient asset to give.
That is where advisors can add significant value.
By helping clients look beyond cash, advisors can identify opportunities to donate appreciated or complex assets in a way that may support charitable goals, improve tax efficiency, and create a more thoughtful giving strategy.
Common Assets Donated to Donor-Advised Funds
Many donor-advised fund sponsors routinely accept straightforward assets such as:
- Cash
- Publicly traded stocks
- Mutual funds
These gifts are common because they are relatively simple to value, transfer, and process.
Acceptance policies vary by sponsoring organization, especially for real estate, business interests, and other complex assets. For clients with concentrated wealth, business ownership, real estate, or highly appreciated assets, charitable planning may require a closer look at which assets are best suited for giving.
Appreciated Securities
Appreciated publicly traded securities are often one of the first non-cash assets advisors discuss with charitably inclined clients.
When properly structured, donating appreciated securities to a donor-advised fund may allow the client to:
- Potentially avoid capital gains tax on the donated portion
- Qualify for a charitable deduction, subject to applicable IRS rules and limits
- Use the donor-advised fund to recommend grants to nonprofits over time
This can be especially useful for clients with concentrated stock positions or investments that have grown significantly in value.
Instead of selling the asset, paying capital gains tax, and then donating the remaining cash, the client may be able to donate the appreciated asset directly.
Real Estate
Real estate may also be considered as part of a charitable giving strategy.
This could include residential property, commercial property, land, or other real estate interests. For clients who own highly appreciated property, a charitable contribution before a sale may create planning opportunities.
However, real estate gifts require careful review.
Before acceptance, factors such as valuation, title, debt, environmental concerns, marketability, transfer restrictions, timing, carrying costs, insurance, taxes, and potential liabilities all need to be evaluated. These gifts should involve legal, tax, and financial advisors early in the process.
Privately Held Business Interests
For business owners, privately held interests may present another planning opportunity.
This may include:
- LLC interests
- Closely held stock
- Partnership interests
- Other private ownership stakes
These gifts can be especially relevant when a client is preparing for a business sale or succession event. In some cases, contributing a portion of the business interest before a sale is legally committed or substantially certain may create charitable and tax planning opportunities.
These situations are complex and must be handled carefully. Timing, valuation, transferability, ownership agreements, and tax treatment all need to be reviewed before moving forward.
Complex Assets Require Case-by-Case Review
At Pinellas Community Foundation, donors may be able to contribute complex assets such as real estate, business interests, LLC shares, closely held stock, and other non-cash assets.
These gifts are reviewed on a case-by-case basis.
Complex asset gifts may require:
- Due diligence
- Qualified valuation
- Review of transfer restrictions
- Legal and tax coordination
- Timing analysis
- Review of carrying costs or ongoing obligations
- Review of potential liabilities
- Foundation review and approval before acceptance
This is why early planning matters. The earlier advisors begin the conversation, the more opportunity there may be to evaluate whether the asset is a good fit for charitable giving.
Why This Matters for Advisors
Donating the right asset can sometimes be more powerful than simply deciding how much to give.
For clients, this may help:
- Improve tax efficiency
- Increase charitable capacity
- Simplify highly appreciated or concentrated holdings
- Support estate or business transition planning
- Create a long-term charitable giving structure
For advisors, these conversations help demonstrate proactive planning value.
Instead of waiting until a client says they want to make a donation, advisors can help identify which assets may be best suited for charitable planning.
A Better Question to Ask
Instead of only asking:
“How much do you want to give?”
A better question may be:
“What asset would be most efficient to give?”
That shift can open the door to more strategic planning.
For clients with appreciated securities, real estate, business interests, or other complex assets, charitable giving may be more than a year-end tax decision. It may be part of a larger wealth, business, estate, and legacy strategy.
Start Before the Asset Is Sold or Transferred
The best charitable planning conversations often happen before a major transaction, sale, or liquidity event is already in motion.
At Pinellas Community Foundation, we work with advisors to help evaluate charitable giving options, including donor-advised funds and complex asset contributions.
If you have a client who is charitably inclined and holds appreciated or complex assets, now may be the right time to begin the conversation. Contact Pinellas Community Foundation to connect with our helpful team members.
