Investing in Others

Be Thoughtful About Giving Back

Consider having a family giving policy or charitable mission statement and prioritize the causes you wish to support financially.

  • Evaluate donations the same way that you analyze investments.
  • Look for organizations that use resources efficiently so your donation dollars will have the biggest impact.
    • Analyze the percentage of donations to an organization that are used to cover administrative and fundraising expenses.
    • The percentage of donations spent on administration and fundraising should be available in a charity’s literature.
    • You can visit Charity Navigator at and look up a charity.
    • The Better Business Bureau also rates charities.


Keep Track of Donations

Keep track of this year’s donations and the acknowledgments, thank you letters, and emails, in a current year tax file, which makes it easier to recall donations at tax time.

  • Note the date, amount, and check number (if you wrote a check) on the solicitation letter or a print out of the email and put it in the file.
  • When you receive an acknowledgment, it goes directly in the file.
  • The current IRS rule is that you need to provide an official acknowledgement for donations of $250 or more.
  • For more information on rules regarding donations, visit


Donate Appreciated Securities

If you own stocks or bonds that have increased in value significantly, consider using them for donations.

  • Donating appreciated securities allows you to avoid paying capital gains taxes.
  • The value of the donation is based on the market value on the date of the gift.
  • If you sell the asset and donated the cash, you will have to pay capital gains.
  • There are considerations:
  • You need to have owned the investment for more than one year to get the full benefit.
  • You will need to provide the cost basis for tax returns, so keep good records.
  • If you decide to donate securities, choose holdings that have the lowest cost basis relative to the current market value. These securities will provide the biggest tax benefit.

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