During a recent visit to campus, Mary, MPH (’76), and her husband, Bill, discussed their desire to donate a gift to SPH in gratitude for the excellent education Mary received that had led to a succession of promotions at the pharmaceutical company she works for. They decided to pledge $25,000 to create an endowed scholarship fund that will help SPH students in perpetuity. Over the years, Mary and Bill have wisely invested in stock that has greatly increased in value. They questioned whether it would be better to donate cash or stock, especially because their stock shares are gaining in value at a much faster rate than the bank interest received on their cash.

Although the scenario depicted above is fictional, it highlights a question commonly asked by donors who have benefited from substantial increases in the value of most stocks during the past decade. In general, given the choice between donating cash and donating the same amount in appreciated stock (owned for more than one year), donors can receive more income tax benefits by giving the stock.

For example, if Mary and Bill donate $25,000 in cash, they will be able to claim a charitable gift deduction for that amount on their tax return. In their 39.6 percent marginal federal tax bracket, their cash gift would potentially save them $9,900 in federal income taxes. If they donate $25,000 in stock, they will still be able to claim that amount as a charitable gift tax deduction, thus potentially saving $9,900 in federal taxes. However, an additional advantage is that there will not be any capital gains taxes assessed on the stock gift. If the total cost of the gifted stock shares was $5,000, Mary and Bill would avoid taxation on $20,000 in capital appreciation, which at the 20 percent federal capital gains tax rate means they would receive $4,000 in additional potential federal tax savings. Their total potential federal tax savings are almost $14,000.

Giving appreciated stock is also easy to do, especially if your stock is held in a brokerage account. You can receive similar income tax benefits by giving appreciated bonds or shares of mutual funds. If you are looking for a way to combine generous support for SPH with income tax advantages, please consider giving appreciated stocks, bonds, or mutual funds. For additional information or instructions about how to give appreciated securities to SPH, please contact:

Vikki Wiebel
Director of Advancement
UIC School of Public Health (MC 922)
2121 West Taylor Street
Chicago, IL 60612-7260
(312) 996-0760
E-mail: vikki@uic.edu