Increasing numbers of alumni, parents, and friends are making gifts to Swarthmore College using appreciated securities including stock, bonds and mutual funds. A donor is entitled to take a charitable deduction for the full fair market value of appreciated securities held longer than one year and usually avoids paying the capital gains tax that would be due if the donor sold the securities.
More information is available in the Guide to Gifts of Securities [pdf].
Effective Date and Value of Your Gift
Swarthmore will value your publicly traded securities based on the mean market value of the securities on the gift date and provide you with a receipt for your tax records. Swarthmore determines your gift date according to the guidelines below. Valuation of closely held securities may differ.
- By mail, it is the later of the post-mark dates of your separately mailed stock certificates and stock powers.
- By electronic transfer, it is the date that the securities enter Swarthmore's account.
- By hand, it is the date that a Swarthmore employee receives the stock certificates and stock powers.
- By reregistering securities in Swarthmore's name yourself, it is the date on the new certificates. (This method takes the longest.)
Guide to Securities Gifts
|Split Certificates||Swarthmore can arrange for a stock or bond certificate to be split if you wish to donate only a portion of the securities represented by the certificate. In your letter to Swarthmore, please provide the number of shares or dollar amount of bonds you wish to give, and the social security number and complete name of the registered shareholder. Also confirm the mailing address for reregistering the remaining shares. Please also provide a blank signed stock power.|
|Depreciated Securities||If you hold securities that have declined in value, it is usually advisable to sell the securities to establish a tax loss and then donate the cash proceeds to Swarthmore.|
|Short-Term Appreciation||Usually you should not make a charitable gift of appreciated securities when you have owned the securities twelve months or less. With such a gift, only your cost basis is deductible.|
|Limits on Deductibility||You can use your deduction up to 30% of your adjusted gross income. You can take any unused deduction in up to five succeeding years.|
|Gifts of Closely Held Stock||You may also give non-marketable or closely held stock to Swarthmore. This type of gift offers many tax advantages, but it requires special handling. Please contact the Office of Gift Planning at (610) 328-8334 or at (866) 526-4438 for information.|
|Gifts of Mutual Fund Shares||The charitable deduction for a gift of mutual fund shares is the public redemption price on the date of gift. Although the tax benefits of giving mutual fund shares are similar to other securities gifts, gifts of mutual fund shares take longer to complete. Please contact Ruth Krakower for more information.|
How to Donate Securities
To Donate Publicly Traded Stock or Bonds Hheld at a Bank or Brokerage Firm
If your stock is held in a brokerage account, send a letter of instruction to your broker or banker with a full description of the securities and your gift's intended purpose. Securities can be sent electronically using the following transmittal instructions:
Contact: Jeffrey Berns 800-524-2423
Merrill Lynch, Account #871-07523; DTC #5198
Contact: Fernando Gonzalez 215-587-4636
The College prefers that donors transfer stock or bonds to its Morgan Stanley Smith Barney or Merrill Lynch accounts. However, accounts are also maintained with the following brokerages:
- Morgan Stanley Smith Barney - California
- Wells Fargo
Please send a copy of your letter of instruction to Ruth Krakower, Director of Alumni and Gift Records at the College, by mail, fax (610 328-8590), or e-mail Ruth at firstname.lastname@example.org. Please also phone (610 328-8407), fax, or e-mail Ruth Krakower to advise her of the transfer. When you contact her, include the following information:
- The purpose of the gift (e.g., Annual Fund or restricted purpose).
- Names of the corporations and the number of shares you authorize.
- Name and phone number of your broker.
To Donate Stock Certificates You Hold
- Send the unsigned certificates, preferably by certified mail, to the College to the attention of Ruth Krakower, Director of Alumni Records and Gifts.
- Copy and send the College one blank stock power for each company whose stock you are transferring. Only the signature line should be filled in, with the signature(s) matching the name(s) that appear on the face of the certificates, or both names if the stock is jointly owned.
- An officer of a commercial bank must guarantee the owner's signature.
- Send the certificates and stock powers in separate envelopes. Send the signed stock power in one and the stock certificate(s) in the other with a letter (also signed by the owner(s) of the stock) stating that the stock is being donated to Swarthmore College.
- Please be sure to mention the purpose of the gift (e.g., Annual Fund or restricted purpose).
You may also make a gift of stocks, bonds, or mutual fund shares to Swarthmore and receive income during your life, a term of years, or provide for income to your spouse, a family member, or friend. There are several plans available. The tax advantages vary according to the arrangement you choose. To learn more, please contact Mike Valoris, Director of Gift Planning, at (610) 328-8323, (866) 526-4438, or email@example.com. You can also visit the Gift Planning Web site for more information.