This spring, as the weather warms up and people venture outside, your clients’ busy schedules get even busier. Even if your clients are tempted to log off and enjoy the sunshine, we encourage you to help them stay the course.

Your clients’ 2024 financial and estate planning goals are important. Now is the time to start tackling those strategies, especially after the tax season dust settles.

This month, we’re covering three topics that can help you counsel your philanthropic clients:

  1. No matter what words you use to express the advantages of giving appreciated assets, it can be hard for clients to hear it truly. Consider showing clients – using numbers and examples – that it really is better to support favorite charities by giving appreciated assets instead of cash. San Diego Foundation (SDF) is here to help.
  2. Help your clients get ahead in their estate planning by leaning into the flexibility and benefits of a fund at SDF, including your clients’ ability to leave permanent legacies to support San Diego (and beyond) for generations to come.
  3. Lots is going on in the world of charitable giving. Our team has curated several articles that are worth reading if you’d like to dig deeper into springtime issues that are trending in philanthropy circles.

As always, we appreciate the opportunity to work together.

Gifts of Appreciated Stock: Let the Numbers Do the Talking

Finance advisor with couple

No matter how frequently you remind clients to pause before they automatically reach for the checkbook to make their charitable gifts, many clients still give cash.

You know that giving long-term appreciated assets is often one of the most tax-savvy ways your clients can support their favorite charities. Nevertheless, it’s sometimes hard to convey that message to clients with words that stick. Next time, consider using illustrations to help clients see the benefits.

Below are three simple examples* to help you show your clients the benefits of giving appreciated stock.

Sally and Bob Jones Give $100,000

Sally and Bob Jones plan to give $100,000 to their donor-advised fund (DAF) at San Diego Foundation to organize all their giving for the calendar year. Let’s assume Sally and Bob have a combined adjusted gross income of $600,000, which lands them in the 35% federal income tax bracket. If they gave $100,000 in cash to their DAF, they could realize an income tax savings, potentially, of $35,000.

What if instead of giving cash, Sally and Bob gave highly-appreciated, publicly-traded stock, valued currently at $100,000, to their donor-advised fund?

Let’s assume they’ve been holding the stock for many years, and the shares have a cost basis of $20,000. Not only are Sally and Bob eligible for a potential income tax deduction that will save them up to $35,000, but they have also potentially avoided $12,000 of capital gains tax that they would have owed if they’d sold the stock (using a long-term capital gains tax rate of 15%).

So, it’s easy to see why Sally and Bob should consider giving highly-appreciated stock instead of cash.

Jenny and Joe Smith Give $1 million

Jenny and Joe Smith plan to give $1 million to community causes this year by adding $500,000 to their donor-advised fund at the SDF, which in turn, they will use to support their favorite charities. They’ll also be making a $500,000 gift to an unrestricted fund at SDF to help address the region’s greatest needs in San Diego.

Aerial view of downtown San Diego from Barrio Logan

Let’s assume that Jenny and Joe are in the highest federal income tax bracket because they earn multiple seven figures. If they were to give $1 million in cash, they could save, potentially, up to $370,000 in income tax. If they gave publicly-traded stock instead of cash, assuming a $200,000 cost basis in stock valued currently at $1 million, they would still potentially save up to $370,000 in income tax, and they would also potentially avoid $160,000 in capital gains tax (based on a long-term capital gains tax rate of 20%).

Tiffany and Brett Thomas Give $5 million

Tiffany and Brett Thomas plan to give a target amount of $5 million to charity as the cornerstone of their overall philanthropy plan. They would like to use publicly traded stock that they’ve held for many years, valued currently at $5 million. They would love to receive a lifetime income stream from these assets so that the remaining assets will flow to their fund at SDF after their deaths.

In this case, you’ll explore setting up a charitable remainder trust that pays out an income stream to Tiffany and Brett while they live and then to the survivor for their lifetime.

Let’s assume that TIffany and Brett are both 55 years old. And let’s assume that the stock has a very low cost basis – just $500,000 – because the Thomases have held it for so long. Depending on the IRS’s applicable rates, and assuming a 5% annual payout rate paid at the end of each quarter, here’s an approximate tax result if you worked with SDF to help Tiffany and Brett establish a charitable remainder trust:

  • $1,042,550 approximate potential income tax deduction based on the present value of the gift of the remainder interest to charity
  • $4,500,000 in capital gains that may not be subject to tax
  • $250,000 in total payments during the first year
  • Annual payments of 5% of the value of the assets in the trust, which means the income stream will fluctuate depending on the value of the assets

Following the death of the survivor of Tiffany and Brett, the remaining assets will flow to the Thomas Family Fund at San Diego Foundation, which Tiffany and Brett have already established and which, upon their deaths, will split equally into two funds. The first fund will be a donor-advised fund for which their children will serve as advisors, and the second fund is an unrestricted endowment fund to support the SDF’s priority initiatives in perpetuity.

Of course, no client’s circumstances will exactly match those of Sally and Bob, Jenny and Joe, or Tiffany and Brett. The net-net here, though, is that our team is happy to discuss the various tax-savvy options for charitable giving in any client situation. We’re here for you.

*These examples are for illustration purposes only. Every client’s situation is different, and therefore the tax strategy and tax impact will be different for each client. For example, these illustrations are based on federal income tax rates only, and you’ll need to evaluate, among many other factors, the impact of state taxes.

“Legacy Funds” and More for Charitable Clients Who Plan Ahead

Grandfather with grandchild doing work in the garden

Getting a jump on a future “to-do” list is always a good feeling. Our team can help you with your clients’ long-term charitable giving plans by putting in-place the structures to receive bequests decades from now.

Consider a case where you’re finalizing an estate plan for a client who would like to leave bequests to multiple charitable organizations. The identity of those specific organizations may be a moving target over the years because of the client’s evolving level of engagement with various charities as a donor, volunteer or board member. In other words, this client likely will want to make small changes to the estate plan’s provisions for charitable giving but leave everything else as is.

For example, a client’s trust could be drafted to provide that 10% of the remaining estate be divided equally among five charities, which of course, could be listed in the trust document. But what if, a few years from now, the client wants to add another charity to that list? Even a small change like this would require an amendment, which can be time-consuming for both the attorney and the client.

Instead, the client’s trust document could name a fund at San Diego Foundation as the beneficiary of 10% of the remaining estate. Then, the client can work with SDF to draft a fund agreement that lists the charities that will share the 10%. When the client wants to add new charities or switch out charities from the list, the client can reach out to our team and execute simple documentation of the client’s updated intent for the fund.

This process is fast and simple, allowing clients to ensure that their bequests are in line with ever-changing needs in the community.

Sometimes, the client may not intend to use the fund during their lifetime. That’s perfectly fine; San Diego Foundation can establish a “legacy fund” to sit dormant and receive assets only after the client passes away. Your client can still name the fund whatever they’d like, and the fund agreement can be modified anytime before the client’s death.

Contact us to learn how legacy funds and other planned giving tools can help your clients achieve their charitable goals during their lifetimes and beyond.

In the Spotlight: Charitable Planning for Wealthy Clients

Aerial view of Del Mar coast

As you read up on techniques to structure philanthropy plans for your high-net-worth clients, we recommend reviewing the potential impact of the estate tax exemption sunset, as well as making sure you’re one of just half of the advisors (!) who are truly helping their clients with charitable giving in the first place.

Our team at San Diego Foundation is happy to help you start the philanthropy discussion with clients. We understand that it’s not always easy, but it is so important.

Learn More

For nearly 50 years, we have partnered with an extensive network of wealth advisors, estate planning attorneys, tax planners and other financial advisors to help high-net-worth clients and families achieve financial planning objectives and charitable giving goals while maximizing tax deductions.

If you want to learn how we can help meet your clients’ financial planning and charitable giving goals in 2024, contact me at (858) 245-1508 or

Partner with SDF