Marcia Stein may not be a day trader, but she's getting pretty good at playing the market. Last month, the executive director of Citymeals-on-Wheels included a note in the group's Thanksgiving mailing asking donors to give stock instead of cash; since the charity wouldn't have to pay the capital-gains tax, donors could effectively give more while skirting the IRS. Within weeks, Citymeals got $48,000 in stock transfers -- a quarter of its total holiday-season donations so far, and four times the amount of stock it received last year. A West Side couple, typical $100-a-year givers, sent in 80 shares of ST Microelectronics. Stein hadn't heard of the business, but she could do the math -- $10,949.60. "It's altruism and self-interest working at the same time," she says.
Stock donations are nothing new in the philanthropic world, but this year the bull market is benefiting even the smallest nonprofits. "When you see food banks doing it, you know something's going on," says Stacy Palmer, editor of the Chronicle of Philanthropy, who notes that the stock-based Fidelity Charitable Gifts Investment Fund (a clearinghouse that saves donors the trouble of picking individual charities) is ranked third in private donations nationally behind the YMCA and the Salvation Army.
Local charities such as Citymeals-on-Wheels, God's Love We Deliver, and the Community Service Society of New York follow a strict policy of immediately cashing in donated shares -- but others are tempted to stay and speculate awhile. City Harvest executive director Julia Erickson says her group's stock donations tripled last year; now she plans to hire an investment firm to help it ride the bull a little longer. "One donor indicated that she would like to make a much larger gift, provided we keep it," Erickson says. "She lives off her stock -- so she thinks we could live off it, too."