Did you know you can make a big impact on Los Padres ForestWatch, while saving money in the process? I want to share some ways that many of our dedicated supporters like you are making the most of their end-of-year donations.
You may be surprised to learn that donating appreciated stock, making a qualified charitable distribution (QCD), or donating from a Donor Advised Fund (DAF) are some of the smartest ways to give — and it benefits you while supporting the mission of Los Padres ForestWatch!
Donating Stock:
Donating stock is the most tax-savvy way to give. It allows you to save on your taxes in two ways: by avoiding capital gains taxes and by allowing you to take an income tax deduction. Compared with donating cash or selling your appreciated securities and contributing the after-tax proceeds, you may be able to automatically increase your gift and your tax deduction by donating stock, bonds, and mutual funds, directly to charities like Los Padres ForestWatch. Many of our supporters are choosing to donate stock this year — will you join them?
The U.S. government taxes capital gains. When you sell appreciated stock, you have to pay taxes on what you earned. This is called a capital gains tax. Depending on your income bracket, you could be taxed up to 20% on your capital gains. And if you have owned the stock for less than a year, it could be taxed even more since it’s treated as regular income. However, if you give this stock to a charity instead of selling it, neither you nor the charity have to pay taxes on it.
Stock donations are also tax deductible. That means that when you file your federal taxes, if you itemize deductions, you can deduct the donations made to ForestWatch from your taxable income. You’re allowed to deduct up to 30% of your adjusted gross income in stocks that you’ve held for at least a year. When you lower your taxable income, you pay less overall in income taxes, saving you money again. If you don’t want to change your portfolio, you can always donate shares of appreciated stock, then repurchase the same number of shares immediately after, so your portfolio stays the same. When you do this, you eliminate all the capital gains on your previous shares and reset your “cost basis” to the current price, possibly saving even more in taxes when you sell the new shares in the future.
If you are interested in making a stock gift, you can follow these easy steps:
- First, discuss income tax implications and estate/planning objectives with your tax advisor, then contact our Director of Development, Jessica Dias, to receive ForestWatch’s brokerage information.
- Next, contact your broker or financial advisor to determine the most beneficial appreciated stock to donate. Complete your brokerage’s paperwork to authorize the stock donation. Please be sure to let your broker know to include your name so that ForestWatch will know who the gift is from.
- Once the stock transfer is complete, ForestWatch will send you a receipt for your records.
Making a Qualified Charitable Distribution (QCD) from Your IRA:
If you are 70 ½ or older and have an Individual Retirement Account (IRA), making a qualified charitable distribution (QCD) to Los Padres ForestWatch is a tax-smart way to make a donation. The QCD allows you to direct IRA distributions – up to $100,000 per year – to qualified 501(c)(3) charitable organizations like ForestWatch. Because the IRA income goes directly to charity, you do not report the distribution as income and do not pay any taxes on the QCD.
Making a QCD is beneficial if you are forced to take a required minimum distribution (RMD) and don’t need the extra money. In addition to avoiding taxable income, your distribution will support ForestWatch’s critical work protecting our public lands. Additionally, by giving a QCD at 70 ½, you will reduce future RMDs by lowering your overall IRA balance. The transfer must be completed by December 31st to count against this year’s RMD requirement.
Not sure where to start? Here is the typical process for making a QCD:
- Communicate with your IRA custodian (where your IRA is held) that you are interested in making a QCD(s) and make the request in writing, specifying the dollar amount you want to contribute.
- Request the check be made payable to Los Padres ForestWatch but be mailed to you. Then forward the check to ForestWatch and we’ll send you a receipt for your records.
Donating from a Donor-Advised Fund (DAF):
Another great way to maximize tax deductions while giving to charitable organizations such as ForestWatch, is to give through a Donor-Advised Fund (DAF). A DAF is an investment account used exclusively for charitable giving. DAFs are established at a public charity and allow donors to make a charitable contribution, receive an immediate tax deduction, and then recommend donations to their favorite charities over time. Donors can contribute to the fund as frequently as they like, and can contribute non-cash assets such as stocks, bonds, mutual funds, cryptocurrency, and real estate as well as cash.
When you contribute to a DAF, you may be eligible to claim an itemized tax deduction for federal and/or state income tax purposes. The amount of the deduction will depend on several factors, including the type of asset donated and how long you have owned it. This arrangement allows you to plan your gift so that you can take the tax deduction when it makes sense for you and to recommend grants to your favorite charitable organizations at any point in the future.
Another perk of giving through a DAF is that it puts the administrative burden on the fund manager and not the donor. Just be sure to let the manager know to share your information with the charity if you want to be acknowledged for the gift.
If you’re interested in setting up a DAF, talk to your financial advisor about a strategy that works for you. If you already have a DAF and want to support ForestWatch’s work to protect public lands, wildlife, and wilderness, talk to your fund manager today.
Making a Planned Gift to ForestWatch:
There are a number of benefits to leaving a planned gift to the charities you love, both for the charity and for the donor. By making a planned gift to Los Padres ForestWatch, you can secure your own legacy while ensuring our work is sustainably funded for the future. Additionally, these charitable gifts are often exempt from estate tax, allowing more of the gift to go directly to supporting our mission.
Giving a bequest to ForestWatch is an easy and powerful way to ensure that we will be here for the long-term, serving as a watchdog for public lands along California’s Central Coast for many future generations to come. Donors who have included ForestWatch in their will or estate plan are part of a special group of donors known as Forever Wild. Your legacy gift keeps wildlife, wilderness, waters, and trails of the Los Padres National Forest protected for future generations.
ForestWatch is here to guide you through the process. We even have some sample bequest language on our website and a whole list of other ways to give through estate planning.
If you’re interested in making a planned gift, talk with your financial advisor today and share with them the information below:
- Legal name: Los Padres ForestWatch
- Address: P.O. Box 831, Santa Barbara, CA 93102
- Tax ID #: 20-1531390
We hope you’ll join us in giving back this holiday season. ForestWatch has so much more work that needs to be done and we need your support to continue winning victories for our region’s wild places. With you by our side, ForestWatch will continue to protect wildlife, wilderness, water, and sustainable access throughout the Los Padres National Forest and Carrizo Plain National Monument for today and generations to come.
If you have any questions or would like additional information, please contact ForestWatch’s Director of Development, Jessica Dias, jessica@lpfw.org, 805-770-5773.
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