Unlocking the Hidden Value of Complex Asset Donations

By Clark Collier, Director of Giving Strategies, Central Indiana Community Foundation

Here’s the good news: your organization has received a generous contribution estimated at over $500,000. The bad news: It is entirely in the form of baseball cards.

What do you do?

As a not-for-profit, your strengths are typically in human services, public advocacy, volunteer coordination, and traditional fundraising. Liquidating a rare 1994 Alex Rodriguez rookie card for maximum value (up to $40,000) may not be in your wheelhouse.

Welcome to the world of complex asset donation, an increasingly popular and effective form of philanthropy!

But despite a growing awareness, not everyone is familiar with what a complex asset is or how it can be effectively donated.

Luckily, CICF can take the “complex” out of the equation at no charge to donors or charitable organization fundholders. And considering the value these assets represent, more of us ought to consider this method of giving and receiving.

Complex assets fall along a spectrum of complexity. Our example of the baseball card collection falls into the “more complex” column. Any valuable, tangible personal property would qualify—art, jewelry, corn silos, Beanie Babies; so too would a controlling business interest or piece of real estate.

These items require us to overcome several legal and logistical hurdles before they can become donatable dollars.

Slightly less complex assets would include insurance policies and retirement accounts. While not requiring as many hoops to jump through, these contain certain nuances you and your organization may not want to navigate on your own.

The least complex assets mostly include publicly traded securities (stocks). That’s probably why these are the most frequently donated type of asset apart from cash. However, these still fall outside the comfort zones of a lot of not-for-profits.

As a result, many organizations decide to continue accepting mostly cash donations. However, when they do, they are forfeiting around 90% of America’s total wealth. Just as important, they are reducing the total value they and their donor represent to one another.

How? In short: taxes.

As a not-for-profit, you’re likely familiar with donors looking to reduce their tax liability. But are you using that impulse to your organization’s maximum benefit?

When an individual sells a complex asset—let’s say ten acres of land—and donates the proceeds, she gets to claim a charitable income tax deduction. However, she’s still liable for a capital gains tax on the appreciation of the real estate. Depending on the increase in value since she’s owned the land, that payment could be significant. Ultimately, that may incentivize a smaller donation.

Instead, if she donates that land directly to an organization’s fund at CICF, for example, she still receives the full charitable income tax deduction but avoids the capital gains tax liability, meaning she has a greater amount to give without having to worry about a tax bill coming due.

Plus, CICF handles all aspects of the liquidation process. Suddenly, this complex gift—still that same ten acres—has become far less complicated while also yielding a bigger benefit to the donor and, quite possibly, a bigger donation.

Unfortunately, since many don’t have a broker like CICF to take care of this process, donations of complex assets still don’t represent as large a portion of charitable giving as they could or should.

But that is changing.

From 2013 to 2021, noncash assets shot up from 27% to 46% of all itemized donations. Between 2017 and 2018 alone, donations of securities increased by over 60%.

That increase is likely because this form of giving satisfies every sort of donor. Whether your donors are looking to reduce a tax liability or wanting to make the biggest social impact possible, the value of a complex asset can be worth as much as 40% more than if it were first converted to cash before donating.

CICF’s clients know that we can take care of the legal and logistical details of complex asset donations at no added cost. All they have to do is educate their donors (or their donors’ advisors) about this powerful form of noncash giving.

When you add CICF’s capacity for processing complex assets to your donation portfolio, you unlock a new level of impact for your organization.


Clark K. Collier, CFRM
Director of Giving Strategies
317-634-2423 x511

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