Gifting mutual fund shares to a charity from Vanguard

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Topic Author
Good Listener
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Gifting mutual fund shares to a charity from Vanguard

Post by Good Listener » Sat Apr 13, 2019 10:31 am

All of their offices are closed over the weekend and I am trying to figure out something. (I will call them Monday but I'm hoping to get a head start on this information?)

I am going to donate shares to a charity using appreciated shares in my total stock market index fund. It looks like one needs to actually fill out a physical paper form and send it to the charity, which accepts it, signs and then mails the form to Vanguard. Is that true? And the charity has to have an account established there... Is that true.

Second, I will use specific ID for the lowest cost shares..it looks like I can only specify the number of shares as opposed to the dollar amount. You of course don't know the price until after the market closes, so then you really can't contribute a specific dollar amount. Do I have this all wrong (hopefully)?

The same concept regarding gifting shares to somebody would seem to apply as well for Dollars vs shares. Is there a way around this?

mhalley
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Joined: Tue Nov 20, 2007 6:02 am

Re: Gifting mutual fund shares to a charity from Vanguard

Post by mhalley » Sat Apr 13, 2019 10:35 am

If you have 25k you want to give, it might be easier to use the donor advised fund process.

https://www.whitecoatinvestor.com/our-d ... haritable/

Fidelity has lower minimums (5k) so if you don’t want to do 25k you could transfer the money there and setup the daf.
https://www.fidelitycharitable.org/
Last edited by mhalley on Sat Apr 13, 2019 10:41 am, edited 4 times in total.

Silk McCue
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by Silk McCue » Sat Apr 13, 2019 10:37 am

You do realize that this won’t matter for 2018 taxes, correct? The timing on the tax calendar and your sense of urgency make me wonder.

Cheers

fposte
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by fposte » Sat Apr 13, 2019 10:42 am

The wiki actually has a page on this. It suggests that yes, the charity does have to fill out the form, and that it has to have a brokerage account somewhere, but not necessarily Vanguard.

Topic Author
Good Listener
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by Good Listener » Sat Apr 13, 2019 10:51 am

Thank you for the responses so far. To the questions for me: yes, it is not for 2018. If it seems urgent, it's only because my personality is such that when I want to try to get an answer I usually like to get it right away. As far as using the donor advised fund, I actually am going to do that but the same issue of shares versus dollars still applies doesn't it? And for gifting shares to individuals, which I would also like to do, the question of shares versus dollars still applies.

Gill
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by Gill » Sat Apr 13, 2019 11:04 am

Good Listener wrote:
Sat Apr 13, 2019 10:51 am
Thank you for the responses so far. To the questions for me: yes, it is not for 2018. If it seems urgent, it's only because my personality is such that when I want to try to get an answer I usually like to get it right away. As far as using the donor advised fund, I actually am going to do that but the same issue of shares versus dollars still applies doesn't it? And for gifting shares to individuals, which I would also like to do, the question of shares versus dollars still applies.
As long as your are giving shares you will not know the exact dollar amount until the transfer is made. If you have a firm dollar committment or the dollar amount is important to you simply transfer shares that are under the desired dollar amount and make up the difference in cash.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

afan
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by afan » Sat Apr 13, 2019 1:39 pm

Definitely do a DAF.

If you don't want to meet the Vanguard minimums for initial donation or individual gifts then open a fund at Fidelity or Schwab. You will have to transfer your shares to F or S to set it up and to replenish the fund. But the gifting is then trivial and quick. Since the DAF does not pay capital gains taxes it sells shares and sends cash to the recipient of the gift.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

BigJohn
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by BigJohn » Sat Apr 13, 2019 3:54 pm

I donate stock from VG to charities annually. The charity does not need to fill anything out, you just need to get account info from them, fill in form and mail to VG. One potential complication with funds is that their brokerage needs to be able to accept and sell them. I donate stock so not an issue but that is likely another question you’ll need to ask before proceeding .

afan
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by afan » Sat Apr 13, 2019 7:33 pm

Before we had a DAF, we ran into the problems with smaller and medium sized charities not able to accept mutual funds. Even giving stock to some was a hassle. In either case we had to get their account information and send a letter to our mutual fund company and brokerage with all the details.
It was a lot of work tracking down this information. Some smaller charities were not set up to receive stocks or mutual funds. Getting all the info and passing it along was extra work.
With the DAF, all the back office issues disappear. Just give them the name of the charity. The DAF does a lookup online and if it finds the charity it is a couple of clicks and done. Never going back.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Stinky
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by Stinky » Sat Apr 13, 2019 7:55 pm

afan wrote:
Sat Apr 13, 2019 7:33 pm
Before we had a DAF, we ran into the problems with smaller and medium sized charities not able to accept mutual funds. Even giving stock to some was a hassle. In either case we had to get their account information and send a letter to our mutual fund company and brokerage with all the details.
It was a lot of work tracking down this information. Some smaller charities were not set up to receive stocks or mutual funds. Getting all the info and passing it along was extra work.
With the DAF, all the back office issues disappear. Just give them the name of the charity. The DAF does a lookup online and if it finds the charity it is a couple of clicks and done. Never going back.
+1

Before we knew about DAF, we contributed mutual fund and company shares to a few charities. What a pain in the rear end! Transfers seemed to take forever, had to juggle the brokerage accounts for each of the charities, the charities had to liquidate the shares themselves, etc. Never again.

We've had a DAF with Fidelity for about 5 years. Even though almost all the rest of our financial life is at Vanguard, we went with Fidelity for DAF, in large part because the minimum grant size is just $50 (much higher at Vanguard). Having a grant size that low means that we funnel basically all our charitable giving.

And the DAF allows for easy bunching of charitable donations, which can be very useful under the new tax law.
It's a GREAT day to be alive - Travis Tritt

drzzzzz
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by drzzzzz » Sat Apr 13, 2019 9:24 pm

I have done this a few times with Vanguard to the SAME charity and they have used two different approaches and neither my flagship rep nor others at Vanguard could explain why it was done differently each time. Once, I needed to fill out a specific form labelled somewhat like donation of funds to charity where I had to fill out my part of the form, then the charity filled out their part, then mail it to Vanguard at which time they then transferred the shares to the charity. The second time, I was able to do it on the phone since I had the charity's account number and they just made it a change of ownership for the shares and no paperwork was filed. The charity has to have an account with Vanguard, if they don't I think they have to open an account to be able to transfer the shares. Personally, because of all the quirks and inconsistencies, I think it is just easier to use a DAF at Fidelity which we fund with appreciated Vanguard mutual funds by filling out a few clicks online at the Fidelity site; they then generate a letter of instruction that we sign, submit to Fidelity, and they initiate and get the funds into our DAF account.

SoAnyway
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by SoAnyway » Sun Apr 14, 2019 12:17 am

OP, good on you for wanting to do good and make good at the same time!

I was in exactly the same boat in 2017. I hadn't yet set up a DAF, and while the DAF-related posts above are correct and well-intended, perhaps you're not there yet and don't have the time/energy to get educated about DAF set-up/fees/etc. right now. (I wasn't at the time; if so, file those posts away for when you're ready.) If you have the time/energy to devote right now to get educated about the DAF route, by all means do so. If you'd prefer my humble $.02 answers to the questions you actually asked, see below.

Short version: What you want to do is easily accomplished at Vanguard (done it myself), but the path depends on whether you're on the brokerage platform or the mutual fund platform. Since you mentioned "end-of-day valuation", I'm assuming that you (like me) are still on the mutual fund platform. I'll add that if you're a Flagship client (as am I), the process will be smoother; my Flagship rep. was instrumental in getting me the RIGHT form to fill out and bird-dogging the folks behind-the-scenes to make sure they understood the client need and did what she told them to do. (No fault of theirs, but they're not as familiar with mutual fund platform client processes since most Vanguard clients are now on the brokerage platform. SoAnyway....)
Good Listener wrote:
Sat Apr 13, 2019 10:31 am
All of their offices are closed over the weekend and I am trying to figure out something. (I will call them Monday but I'm hoping to get a head start on this information?)

I am going to donate shares to a charity using appreciated shares in my total stock market index fund. It looks like one needs to actually fill out a physical paper form and send it to the charity, which accepts it, signs and then mails the form to Vanguard. Is that true? And the charity has to have an account established there... Is that true. No. There is single form you can fill out and send to Vanguard and the organization doesn't need to sign it, and it doesn't matter whether they have an account at Vanguard or not. However, you will first need to (a) make sure the charity you want to donate to can accept appreciated shares. Assuming so, (b) you need to obtain the identifying info of the brokerage account they want you to have the shares transferred to.

In my case, this info was readily accessible on my selected charitable organization's website. (Hey, they're no dummies - They did everything possible to make it EASY for anyone who's trying to give them $$ in whatever form....duh.) I'm guessing - without knowing - that some of the snafus experienced by earlier posters before they'd set up their DAFs involved attempts to donate to organizations that weren't set up to receive shares, but once the charity knew of the potential donation, they were doing anything possible (however competently or in-) not to lose that potential donation, but who knows. SoAnyway...

In my case, if memory serves my organization's account was a JPMorgan account - Anyway, it wasn't Vanguard. I inserted their brokerage account info into the appropriate places on the CORRECT Vanguard form that my rep. emailed me within the Vanguard messaging system (see below), and Vanguard made it happen without a hitch.

Two caveats:

(1) The V website isn't the best place to start, esp. if you're on the mutual fund platform, so call to make sure you get the right form and be clear in stating that you are on the ____ platform, and need the correct form to fill out to donate appreciated Vanguard mutual fund shares to a charitable organization. Backstory: I started as you did (on the website after hours) and got a bit frustrated; when I called my rep. in the am, she got me the right form/straightened everything out/stayed on her back-office folks to make sure all went as intended.

(2) Having viewed my receiving organization's website and taken down their brokerage account details and inserted them into the Vanguard form, out of an abundance of caution and to make sure the shares went to the right place, I called the organization before submitting the form. I basically said, "Hi, this is SoAnyway. I support your mission and I'm about to submit a form to Vanguard to donate some shares of XYZ corp. to your organization. Per your website instructions, I just want to confirm your brokerage account info that's listed on your site for where the shares should be deposited."
The person who answered the call confirmed the info (after falling over himself in expressing his gratitude on behalf of the organization, blah/blah/blah - which I didn't need to hear but maybe some donors get off on that. Who knows. Come to think of it, it probably helped that XYZ = AAPL, but whatever....) In any case, after I'd confirmed the info, he did humbly request that once submitted to V, I email him a copy of the form submitted so that he could follow up at his end with the organization's brokerage firm to assure that all went smoothly, which I was happy to do and did. FWIW, my account reflected the donated shares properly on Vanguard's website very promptly and my 1099 from Vanguard properly reflected the transaction as intended.


Second, I will use specific ID for the lowest cost shares..it looks like I can only specify the number of shares as opposed to the dollar amount. You of course don't know the price until after the market closes, so then you really can't contribute a specific dollar amount. Do I have this all wrong (hopefully)?The same concept regarding gifting shares to somebody would seem to apply as well for Dollars vs shares. Is there a way around this?
Yes. At least if you're a Flagship client, and probably even if not - But you need to get in touch with your Vanguard rep. In my charitable donation case, I only had one tranche of shares, all purchased in a single transaction shortly after the Financial Crisis so it didn't come up then. However, in a separate gifting situation (unrelated to charitable donations), I wanted to "spec id" a gift of shares to a relative. My Flagship rep. made that one happen as intended as well, though it was a while ago so I don't remember all the details of how it went. Perhaps others have more relevant/recent experience. Bottom line: Yes, you can gift specifically identified shares but it will likely require you to (*gasp*) deal with a human being who is actually and sincerely trying to help you.... ; )
Good luck, OP, and I applaud your charitable inclinations! :sharebeer :happy
Nothing in this post constitutes legal or medical advice. | Consult your attorney or physician to verify if/how anything stated might or might not be applicable to your specific situation.

Topic Author
Good Listener
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Re: Gifting mutual fund shares to a charity from Vanguard

Post by Good Listener » Mon Apr 15, 2019 3:51 pm

SoAnyway wrote:
Sun Apr 14, 2019 12:17 am
OP, good on you for wanting to do good and make good at the same time!

I was in exactly the same boat in 2017. I hadn't yet set up a DAF, and while the DAF-related posts above are correct and well-intended, perhaps you're not there yet and don't have the time/energy to get educated about DAF set-up/fees/etc. right now. (I wasn't at the time; if so, file those posts away for when you're ready.) If you have the time/energy to devote right now to get educated about the DAF route, by all means do so. If you'd prefer my humble $.02 answers to the questions you actually asked, see below.

Short version: What you want to do is easily accomplished at Vanguard (done it myself), but the path depends on whether you're on the brokerage platform or the mutual fund platform. Since you mentioned "end-of-day valuation", I'm assuming that you (like me) are still on the mutual fund platform. I'll add that if you're a Flagship client (as am I), the process will be smoother; my Flagship rep. was instrumental in getting me the RIGHT form to fill out and bird-dogging the folks behind-the-scenes to make sure they understood the client need and did what she told them to do. (No fault of theirs, but they're not as familiar with mutual fund platform client processes since most Vanguard clients are now on the brokerage platform. SoAnyway....)
Good Listener wrote:
Sat Apr 13, 2019 10:31 am
All of their offices are closed over the weekend and I am trying to figure out something. (I will call them Monday but I'm hoping to get a head start on this information?)

I am going to donate shares to a charity using appreciated shares in my total stock market index fund. It looks like one needs to actually fill out a physical paper form and send it to the charity, which accepts it, signs and then mails the form to Vanguard. Is that true? And the charity has to have an account established there... Is that true. No. There is single form you can fill out and send to Vanguard and the organization doesn't need to sign it, and it doesn't matter whether they have an account at Vanguard or not. However, you will first need to (a) make sure the charity you want to donate to can accept appreciated shares. Assuming so, (b) you need to obtain the identifying info of the brokerage account they want you to have the shares transferred to.

In my case, this info was readily accessible on my selected charitable organization's website. (Hey, they're no dummies - They did everything possible to make it EASY for anyone who's trying to give them $$ in whatever form....duh.) I'm guessing - without knowing - that some of the snafus experienced by earlier posters before they'd set up their DAFs involved attempts to donate to organizations that weren't set up to receive shares, but once the charity knew of the potential donation, they were doing anything possible (however competently or in-) not to lose that potential donation, but who knows. SoAnyway...

In my case, if memory serves my organization's account was a JPMorgan account - Anyway, it wasn't Vanguard. I inserted their brokerage account info into the appropriate places on the CORRECT Vanguard form that my rep. emailed me within the Vanguard messaging system (see below), and Vanguard made it happen without a hitch.

Two caveats:

(1) The V website isn't the best place to start, esp. if you're on the mutual fund platform, so call to make sure you get the right form and be clear in stating that you are on the ____ platform, and need the correct form to fill out to donate appreciated Vanguard mutual fund shares to a charitable organization. Backstory: I started as you did (on the website after hours) and got a bit frustrated; when I called my rep. in the am, she got me the right form/straightened everything out/stayed on her back-office folks to make sure all went as intended.

(2) Having viewed my receiving organization's website and taken down their brokerage account details and inserted them into the Vanguard form, out of an abundance of caution and to make sure the shares went to the right place, I called the organization before submitting the form. I basically said, "Hi, this is SoAnyway. I support your mission and I'm about to submit a form to Vanguard to donate some shares of XYZ corp. to your organization. Per your website instructions, I just want to confirm your brokerage account info that's listed on your site for where the shares should be deposited."
The person who answered the call confirmed the info (after falling over himself in expressing his gratitude on behalf of the organization, blah/blah/blah - which I didn't need to hear but maybe some donors get off on that. Who knows. Come to think of it, it probably helped that XYZ = AAPL, but whatever....) In any case, after I'd confirmed the info, he did humbly request that once submitted to V, I email him a copy of the form submitted so that he could follow up at his end with the organization's brokerage firm to assure that all went smoothly, which I was happy to do and did. FWIW, my account reflected the donated shares properly on Vanguard's website very promptly and my 1099 from Vanguard properly reflected the transaction as intended.


Second, I will use specific ID for the lowest cost shares..it looks like I can only specify the number of shares as opposed to the dollar amount. You of course don't know the price until after the market closes, so then you really can't contribute a specific dollar amount. Do I have this all wrong (hopefully)?The same concept regarding gifting shares to somebody would seem to apply as well for Dollars vs shares. Is there a way around this?
Yes. At least if you're a Flagship client, and probably even if not - But you need to get in touch with your Vanguard rep. In my charitable donation case, I only had one tranche of shares, all purchased in a single transaction shortly after the Financial Crisis so it didn't come up then. However, in a separate gifting situation (unrelated to charitable donations), I wanted to "spec id" a gift of shares to a relative. My Flagship rep. made that one happen as intended as well, though it was a while ago so I don't remember all the details of how it went. Perhaps others have more relevant/recent experience. Bottom line: Yes, you can gift specifically identified shares but it will likely require you to (*gasp*) deal with a human being who is actually and sincerely trying to help you.... ; )
Good luck, OP, and I applaud your charitable inclinations! :sharebeer :happy
Thank you very much for your help and kind words.

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