Fidelity Charitable Gift Fund is seeing an increased trend in donors looking to donate illiquid, or what are known as “complex assets.”

On Friday, the Gift Fund announced an expanded consultation service and series of seminars on strategic giving of C- and S-Corp stock, restricted stock, limited partnership interests, real estate and other privately held assets.

Mergers and acquisition and IPO activity has increased recently and the Gift Fund has, in turn, seen donations of complex assets nearly quadruple in the first quarter to $24 million, or 9% of overall contributions. In the first quarter of 2010, donations of complex assets were just over $6 million, or 2%, of overall contributions.

“While gaining in popularity, there is still a broad lack of understanding of the benefits and the option of donating these assets to charity, and a perceived complexity around the process for doing so,” said Karla Valas, managing director of the Gift Fund’s Complex Assets Group, in a press release. “The Gift Fund has the in-house resources to make this process simple for donors and advisors and has built an expertise in this area since our inception 20 years ago.”

Valas explained that complex assets are generally highly appreciated and donating them to charity before a potential sale transaction enables the donor to minimize capital gains tax on the sale of the asset. In addition, by donating these assets to a public charity, like a donor-advised fund, donors can deduct the current market value of the asset.

“Donor-advised funds are uniquely suited to accept donations of illiquid assets especially when a donor has a time-sensitive need, wants to fund multiple charities and/or hasn’t decided on charitable recipients,” said Valas.  “In addition, by using a donor-advised fund, like the Gift Fund, donors realize an even greater charitable impact because grant recipients avoid what could be costly diligence and review efforts if they were to accept these donations directly.  The result is more money for the mission of the charity.”

Fidelity’s seminars will help advisors and their clients review the types of assets available for donating and the process, timing, valuation and liquidation options.  The seminars will be held in New York City on June 16; Philadelphia on September 27; Chicago on October 12; and Boston on October 20. 

“Complex assets are often the most powerful assets to give in a client’s portfolio,” said Sarah Libbey, president of the Fidelity Charitable Gift Fund, in a press release. “The bulk of wealth in this country is held in private companies.  Merger and acquisition (M&A) activity is now reaching pre-recession levels, and capital gains taxes are expected to rise.  Given all of these factors, advisors have a key opportunity to help their charitably inclined clients who own these non-publicly traded assets give more by minimizing taxes and passing the savings directly to the charities.”




Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access