Resources You Can Use
Legal Question of the Month with Ben McDearmon, Director of Legal Resources
Question: We’ve recently had two donors initiate stock / mutual fund gifts in 2023, only to see the securities hit our account in 2024. With physical checks, we go by the date of the postmark, even if we receive the gift the next year. Is there any kind of similar rule with securities?
Answer: Questions involving the effective date of gifts of securities can get complicated because it will largely depend on which of the various methods of transfer a donor uses to make the gift. In most cases, the effective date of the gift is when it is delivered to the foundation, regardless of when the donor initiated the transfer. However, in certain circumstances the donor may claim an earlier date if they can prove they irrevocably parted with ownership as of that date. For example, when using the U.S. Postal Service to mail stock certificates to a charity, the gift is considered effective on the date the donor mails it, since the donor has no ability to retrieve items once they are placed in the mail (note that this rule doesn’t apply to delivery through FedEx, UPS, or similar companies because they do not have the same legal obligations the USPS does to ensure delivery to the addressee—gifts sent through those services are deemed effective when received by the charity).
If the brokerage firm can provide the donor with documentation showing that the gift was irrevocably initiated before the end of the year, the donor might be able to claim the gift was effective as of that date, but for your purposes you should only provide confirmation of dates of which you have actual knowledge. Typically, you’d only have knowledge of the date the securities were received in your account and shouldn’t provide any other information beyond that. You should make it clear to the donor that the date of the gift on your end may not be the same one the donor uses for determining their charitable deduction.
Council members are able to send their questions to our Legal team for expert advice and analysis. You can take advantage of this member benefit by becoming a member today.
DAF Regulation Comment Period Extended
Recently, the Department of Treasury and IRS proposed regulations regarding donor-advised funds (DAFs), aiming to provide clarity on various definitions and specifics. In response to the Council's request, the Treasury has extended the comment period to February 15, 2024. This proposal establishes foundational definitions for future regulatory actions. Stakeholders are encouraged to share their feedback on the potential impact of these regulations on charitable giving by reaching out to designated contacts or emailing govt@cof.org.
2024 Trainings on the Calendar
The full schedule of 2024 Council trainings is on our Events page, and registration is open for all trainings through May.
If you're looking to take Community Foundation Essentials (CFE) Fundamentals, Legal Matters, Essentials of Policy Advocacy, or our brand new Global Grantmaking Essentials in 2024, take a look at the calendar and register today!
Philanthropy Exchange Conversations for You
News Articles
Upcoming Events
New Member Spotlight
.jpg?upscale=true&width=200&height=112&upscale=true&name=contest-final-files-download%2B(2).jpg)
