Gifts of Stocks & Securities
Many of our alumni and friends donate stocks, bonds, and shares in mutual funds to the University. These gifts of securities can lead to a gift much larger than what many individuals thought they could give. A gift of securities should be discussed with a representative of Tuskegee's Office of University Advancement in advance of making such a gift.
Current tax laws make it possible for you to make a charitable gift of appreciated stock at a low after-tax cost.
Here's an example of how a gift of securities works:
- Mr. Johnson wants to make a gift of $50,000 to Tuskegee University. Mr. Johnson decides to use his portfolio of appreciated securities to make his gift.
- Mr. Johnson chooses a technology growth stock he purchased 3 years ago for $30,000. The stock now has a fair market value of $50,000, creating a capital gain of approximately $20,000. Mr. Johnson informs the Office of University Advancement that he is instructing his broker to hold (transfer) the stock to Tuskegee University.
- The charitable deduction is determined by using the average between the high and low price on the date of the gift. That day is determined by the day the transferred stock reaches Tuskegee University's account.
- Mr. Johnson receives the following benefits:
- A charitable deduction for $50,000, the fair market value of the stock.
- Avoidance of tax on $20,000 of long-term capital gain.
- Benefit of making a $50,000 donation for an out-of-pocket cost of $30,000.
- Donor's net cost of gift (after tax advantages assuming a 35% tax bracket) of $8,500*.
- Donor receives satisfaction of making a major gift to Tuskegee University.
*Please consult your financial advisor for your specific situation.