Funding Change Consulting Blog Advice

Don’t Forget the Fine Print:
Important tax messages for donors

Remind your donors of the (other) benefits of giving

While they shouldn’t be the heart of your fundraising appeal, there are two important messages you want to send to your supporters between now and December 31st. One relates to gifts of appreciated stock…The other is for donors who are 70 ½ years old or older.

Both could have significant tax implications and may be additional motivation for giving…

  • Gifts of Appreciated Stock: Donating stocks, bonds, or mutual funds held longer than one year allows the donor to avoid paying capital gains tax. And they could also receive an income tax deduction for the current market value of the gift—deducting gifts totaling up to 30% of their adjusted gross income in any year, with a five-year carryover for any excess. The stock must be transferred to your nonprofit’s account on or before December 31st to count for the 2018 tax year. Bottom line: donating appreciated securities can bring significant tax advantages while making a difference to an important cause.
  • Gifts from Individual Retirement Accounts (IRA): Starting at age 70 ½, people with IRAs have to start taking distributions from those accounts each year. For folks who don’t need that money to live, it’s another way to support causes they care about while saving on their taxes. Charitable rollover gifts made before December 31st can count toward their required minimum distribution, lower their taxable income, and help an organization they believe in.

There are many ways to share this information…You can include an insert with your year-end appeal. You can put the info on the back of your reply card. You can call or email.

As always, multi-channel communication is best so think about doing a combination of these, if possible. But regardless of how you decide to act on this, make sure you’re taking advantage of these extra incentives to motivate folks to give.

Important Disclaimer!

I’ve vetted this information with a tax accountant but that just means the information is accurate generally speaking. Everyone’s tax situation is different. So I urge you to include a “cover your ass” disclaimer to the effect of…This is not intended to be professional tax advice. If you are considering a gift, please consult with your financial advisor to understand your potential tax deductions.


Tina Cincotti, owner of Funding Change, is a donor communications expert and general nonprofit nerd.
November 6, 2018

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