As the giving season gets underway, we’d like to share how you can support incredible work within your community while also receiving significant tax benefits. Giving securities (stocks, bonds, or mutual funds) supports dozens of local programs while at the same time helping you reduce or eliminate capital gains tax.

Donating appreciated stock is one of the most tax-effective – and impactful – ways to support United Way of 1000 Lakes and other nonprofits that matter to you. If you donate a stock you’ve held for over a year, you’ll receive an income tax deduction for the value of the stock at the time of the gift. You’ll also avoid paying capital gains tax, which you’d have to pay if you sold the stock yourself.

For example, if you bought a stock of $1,000 five years ago and it is currently worth $5,000, you will have a capital gain of $4,000 if you sell it. However, if you donate the stock to United Way, you receive a $5,000 charitable income tax deduction and realize no capital gains.

Stock donations can help you make a larger impact than you thought possible or satisfy multi-year pledges.

To maximize both impact and personal benefits, you need to donate the stock directly to United Way rather than selling it yourself. A financial advisor can transfer your stock gift to United Way’s account. A stock gift represented by a certificate must be endorsed by the holder of the stock before being delivered to United Way.

It is best to initiate your stock transfer at least a week before the end of the year to allow time for the brokerage companies to process the stock transfer. When you’re getting started, take a look at our step-by-step instructions for initiating a stock gift.

To learn more about planned giving, including legacy endowment gifts, please email Executive Director Kimberly Brink Smith at kimberly@uwlakes.org or call 218-999-7570. Visit uwlakes.org/ways-to-give for a full range of ways to invest in your community through United Way.