Orthogonal to the risk issue, but still important when donating, is that nonprofits are exempt from capital gains taxes. This means that if you happen to end up with stock that has appreciated since you got it, you should give stock before you give dollars; and if you have stock that has depreciated, you should keep that before you keep dollars, since selling it will offset other taxes. I believe Fidelity has a special fund that lets you transfer ownership of stock, sell it without capital gains, and give the charity dollars with no extra overhead for them. Other brokers probably do too.
Re: charitable gift funds. Fidelity calls it the Charitable Gift Fund, I know there are similar funds managed by other places. The way it works is that you transfer your appreciated stocks to it and take the tax deduction in the year they are transferred. Fidelity sells the stock and you elect which of their funds (growth, bonds, etc.) the proceeds should be invested in. When you wish to donate to a charity, you go online and direct Fidelity to make the donation. It must be to a 501c3 approved charity and a minimum of $50 must be donated. It’s as quick and easy as writing a check and you can make the donation anonymous if you wish. Fidelity does collect some management fees for the service, but they aren’t very high.
Orthogonal to the risk issue, but still important when donating, is that nonprofits are exempt from capital gains taxes. This means that if you happen to end up with stock that has appreciated since you got it, you should give stock before you give dollars; and if you have stock that has depreciated, you should keep that before you keep dollars, since selling it will offset other taxes. I believe Fidelity has a special fund that lets you transfer ownership of stock, sell it without capital gains, and give the charity dollars with no extra overhead for them. Other brokers probably do too.
Re: charitable gift funds. Fidelity calls it the Charitable Gift Fund, I know there are similar funds managed by other places. The way it works is that you transfer your appreciated stocks to it and take the tax deduction in the year they are transferred. Fidelity sells the stock and you elect which of their funds (growth, bonds, etc.) the proceeds should be invested in. When you wish to donate to a charity, you go online and direct Fidelity to make the donation. It must be to a 501c3 approved charity and a minimum of $50 must be donated. It’s as quick and easy as writing a check and you can make the donation anonymous if you wish. Fidelity does collect some management fees for the service, but they aren’t very high.