Roboadvisor Betterment has devised a great new way for their customers to give to charities. Through their new Betterment Charitable Giving service, clients can donate shares in their existing portfolios to charities of their choice. According to their website, there are multiple benefits, but the most significant is that by donating appreciated securities to a charity, neither the donor nor the charity pays capital gains tax. Superb idea, and as we mentioned in the headlines, just in time for the 2017 holiday season
“NEW YORK, Nov. 15, 2017 /PRNewswire/ — Betterment, the largest independent online financial advisor, today announced the launch of its Charitable Giving service. Betterment Charitable Giving is the smart, easy way to maximize every dollar you donate to charity. Customers will now be able to donate shares directly from their accounts to charities on Betterment’s platform in an easy and tax-efficient way.
“Betterment wants to help manage important financial aspects of our customers’ lives—from saving for retirement to looking for ways to financially support the causes they care about,” said Jon Stein, CEO of Betterment. “We’re launching the Charitable Giving service to provide a vehicle that makes the giving process easy, accessible, and even more impactful. We hope this mutually benefits our customers and charitable partners.”
“Betterment customers can now utilize the tax-smart strategy of giving appreciated shares to non-profits, taking advantage of an additional tax benefit not available with cash gifts,” said Alex Benke, VP of Advice & Investing at Betterment. “This has long been a practice of smart investors, and we’ve made it both simple and free.”
The Charitable Giving service enables customers to donate to a Betterment partner charity of their choice with appreciated shares directly from their account. Customers simply decide the amount they’d like to donate, and Betterment funds it with the most appreciated shares in their portfolio. There are two main benefits of this: (1) Customers save more on taxes because, in addition to getting the deduction, they can avoid the capital gains taxes they’d typically have to pay on appreciated shares, and (2) charities get the full donation, as opposed to putting some of it toward credit card processing fees or other intermediary fees.
Giving through Betterment also means that 100 percent of charitable contributions go toward supporting the cause. Giving appreciated shares means a more valuable donation to the donor, and by eliminating intermediary fees, typically paid out to a wealth manager or for credit card processing, charities can keep the entire donation.
John Folsom, President of Wounded Warriors Family Support said, “We are very excited to be working with Betterment to offer Americans the opportunity to support our military families through a seamless, cost-saving online tool. Having 100 percent of donor contributions go directly to our organization means we can help more families who need and deserve our help. More caretakers of our combat-wounded will get the break they need to care for themselves. More families will attend a retreat to heal and bond. More shattered lives will be put back together.”
“Through our one-to-one mentoring programs and education initiatives, we have been able to change the lives of thousands of young people in New York City each year by matching them with caring, adult mentors,” said Hector Batista, chief executive officer of Big Brothers Big Sisters of NYC. “All contributions to our organization are critical, as they enable us to build upon these programs and reach even more children across the five boroughs. We’re thrilled to work with Betterment to raise important funds that will further our mission of helping at-risk youth to succeed in life.”
Sister Tesa Fitzgerald, CSJ, Executive Director at Hour Children said, “We’re thrilled to be working with Betterment and firmly believe our partnership will be mutually beneficial. Betterment’s progressive Charitable Giving service allows donors to easily give donations which will positively impact the work we are doing to help incarcerated and formerly incarcerated women and their children successfully rejoin the community, reunify with their families, and build healthy, independent and secure lives.”
Rob Mather, Founder and CEO of the Against Malaria Foundation said “This is a terrific initiative. 100% of the funds passed to AMF will buy anti-malaria nets that will protect children under five and pregnant women – those most at risk from malaria – and others, when they sleep at night, from the bites of malaria-carrying mosquitoes that cause severe illness, or worse. What Betterment is doing here will help us save many lives.”
At launch, Betterment has several charitable partners that Betterment users can choose to donate to: The Breast Cancer Research Foundation (BCRF), UNICEF USA, World Wildlife Fund, Feeding America, Big Brothers Big Sisters of NYC, Save the Children, Wounded Warrior Family Support, Hour Children, Against Malaria, DonorsChoose, GiveWell, and more to come. This service will be available to customers on November 28th, 2017.
Betterment will continue to identify valuable organizations to support, and hopes to partner with all major charities and nonprofit organizations in the future.
For more information, please visit Betterment.com.