Since most charitable giving is done during the holiday season (mark your calendars, #GivingTuesday is November 29th!), we wanted to talk with longtime Project 2 Heal support and CEO/Financial Advisor at My Money Coach LLC, Mike Ross CFP®. Mike offered some great advice about a crucial way to make your donation do as much good for you as it does for us.
Giving the Gift of Security (...or Securities!)
While making donations to charity brings both the satisfaction of helping further an important mission as well as potentially saving you money on taxes, did you know that many donors are leaving money on the table by simply writing a check to their favorite charity?
Since I'm not a tax advisor, I encourage you to speak with your own tax advisor to determine the best scenario for your personal giving strategy. However, I would like to point out how gifting appreciated securities works within the tax code and how it might be an effective tool to stretch your philanthropy dollars.
Let's Compare Two End-of-Year Scenarios:
A gift of $50,000 cash
A gift of $50,000 in appreciated securities
First, let's look at the similarities. Regardless of whether you give $50,000 in cash or $50,000 in appreciated securities, the charity receive $50,000 and you receive credit for making a $50,000 donation, which can reduce your tax liability. At first glance, the two methods are identical in that they provide the same contribution amount, same deduction from your net worth, and the same amount of money for the nonprofit to put toward their mission.
Gifting Appreciated Securities Vs. Cash
However, there is a major benefit in gifting appreciated shares that cash gifts do not provide: total avoidance of capital gain tax on the gift shares. The capital gains tax rate can be as high as 20%, and by gifting appreciated securities the tax can be completely avoided on these securities.
Let's assume you purchased shares on stock five years ago for $25,000 and they are now worth $50,000. If you simply wrote a check for $50,000, you would get credit for your donation, but you would still be in possession of these shares that have an unrealized capital gain embedded within. Based on the current tax rates, selling these shares could result in a tax liability of almost $5,000 (based on the 20% maximum capital gains tax rate.)
Rather than holding onto that potential future tax liability, you could instead simply donate the appreciated shares and then purchase $50,000 of the same securities if you wanted to continue to hold it. This would have no impact on the charity, but instead would prevent capital gains tax from ever being paid on those investments.
Create Your Giving Strategy for 2022
While this giving strategy is easy with things like stocks and bonds, it can also be done with any other appreciated property. If you want to learn more, I'm happy to chat with any Project 2 Heal donors to answer questions and help make your gifts more powerful!
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Training and Nurturing Puppies at Project 2 Heal:
At Project 2 Heal, we breed Labrador Retriever puppies for the purpose of donating these animals at 8 to 12 weeks of age to one of our partner organizations. From there, our puppies are trained extensively in service dog work and matched with an individual in need.
Our process begins with Early Neurological Stimulation, which are exercises conducted during the first two weeks of life—beginning at only 48 hours after birth!—that slightly stress the puppy's nervous system and allow them to become less reactive to novel stimuli as adults. This process includes the following:
Tactile stimulation: Stimulating puppy paws through touch our tickling.
Holding the head of the puppy erect.
Holding the head of the puppy pointed downward.
Supine position: Resting the puppy on its back in the palm of hands.
Thermal Stimulation: Placing feet of puppy on top of a cool, damp towel and allowing the puppy to move about.
Service Dog Scent Training:
Also occurring during the first 14 days, service dog training includes a process called early scent introduction. This training exposes dogs to smells it will encounter during working life. During this process, trainers pay close attention to the way puppies react to various smells. This helps identify which puppies may not be suited to work as a service dog.
Service Dog Clicker Training:
Championed by Karen Prior Academy, clicker training service dogs is a method that teaches puppies about associations. Puppies learn commands through a combination of rewards and clicking sounds. During service dog training, high-level tasks are broken into smaller tasks, after which puppies are rewarded with food and stimulated with sound from a handheld clicker.
Eventually food and clicking sounds are phased out so that puppies are able to execute tasks upon command.
Our mission is to reduce the cost and time necessary to place a service dog with a veteran, child with special needs, or adult with disabilities.
How Can You Help Further Our Mission?
When you donate only $5 per month, your contribution covers important expenses, including:
First vet visit for entire litter
50 pounds of high-quality dog
1 puppy eye exam
6 bags of high-value reward training treats
1 puppy-in-training service dog vest
As you can see, there are a number of ways that $5 monthly donations can make a real impact at Project 2 Heal. With an average cost of $5,000 to raise and train a puppy litter of puppies through the first 8 weeks of life, we'd love for you to join us on our mission.
You can become a donor at any level that works for you. We need your help to raise puppies and change lives.
$5 Monthly Donors
Our bread and butter (or should we say, "kibble?"), these donors cover items listed above, including first vet visits!
$10 Monthly Donors
Each of our $10 monthly donors feeds an entire litter from birth to donation. (That's a lot of puppy food!)
$25 Monthly Donors
$25 a month prevents fleas and ticks for a pup. With 30+ puppies expected in 2021, these donors mean the world!