How to stretch charitable dollars (Chris Wheaton)
So, often times we find, when we start working with a client, they're only giving to charities via cash gifts. So, one of our first conversations is to talk about using long term capital gain property.
The tax benefits are really unrivaled, to the extent someone has any lower tax basis securities in their portfolio, which almost everybody does. It's really a no-brainer to utilize those securities versus cash. They get the write-off for those at fair market value, so it may only be costing them 50 cents on the dollar to give to a charity. And then on top of that, if they get an extra 20 percent tax benefit of avoiding the capital gain, the actual cost of giving is driven down considerably. And that either allows them to give the same amount they've always been giving, or if they're getting that big tax write off, they might actually bump up the amount of giving they're doing each year.
The vast majority of our clients have charitable intent and it's almost a shame to not set-up one of these Schwab Charitable funds to help them because it is so tax efficient and it's probably the easiest way for them to give to multiple charities.
I have a Schwab Charitable account, personally. And the features I love are probably what the clients love. Once I've got the charities that I give to regularly in the system, it only takes me a few minutes to quickly make gifts to charities. And the flexibility to be able to give more in some years and less in others is a great benefit.