Karla Valas has seen some interesting assets that donors have considered giving to charity in her 15 years with Fidelity Charitable, among them:
- A thoroughbred racehorse
- A seat on the New York stock exchange
- A grain elevator
- An interest in a major league baseball team
- A beach house in Virginia
“Wine, of course, is very popular,” explains Valas (left), the managing director of complex assets for the Boston-based firm, noting that a donor once developed an allergy and could no longer partake of the fruity elixir and thus willed his entire collection. “It could be a pile of dirt. As long as something has value between a buyer and seller, and is a ‘low friction’ transaction, we’ll take a look at it.”
What she takes is mainly appreciated stock and other corporate assets, usually either from business owners of key executives. And although the assets her clients donate are complex, she insists the process isn’t.
“We know what we’re looking for, so we pre-scrub everything prior to the donor’s liquidity event so it’s ready to go and as seamless as possible,” Valas notes. “Our due diligence process is board approved and it’s one that protects the donor and charity from risk.”
Part of the ability to protect interested parties in this manner is due to the fact they don’t provide tax advice, and instead rely on advisors to fill that role.
Until recently, complex assets were a largely untapped source of funding for philanthropic endeavors, Valas notes. But more donors and their advisors are becoming aware that they can donate these assets and of the tax advantages associated with doing so and contributions are becoming more common. The trend might also get an added boost from the American Taxpayer Relief Act, she adds, which makes donating these types of assets even more attractive.