Getting creative: Noncash assets and the charitable planning conversation

For many advisors, charitable giving conversations tend to center on cash and appreciated stock, and for good reason. Appreciated stock is an excellent choice for funding a donor-advised or other type of fund at Kitsap Community Foundation because it may avoid capital gains tax while also potentially triggering eligibility for a charitable deduction at fair market value.

But for some clients, especially business owners, collectors, and affluent retirees, significant wealth may exist entirely outside a traditional investment portfolio. Tangible assets like classic cars, fine art, or niche collections can represent a unique combination of characteristics: meaningful value, ongoing maintenance costs, and emotional attachment. Together, those factors can add up to a real charitable planning opportunity.

Classic cars alone offer a striking example. Some estimates put the total at more than 43 million vehicles in the United States, with an estimated $1 trillion in total insurable value. The same logic applies across categories: assets purchased years ago may now hold substantial value while generating storage costs and succession questions that heirs may not want to inherit.

Here are four things to consider as you work with charitable clients:

Always reach out to Kitsap Community Foundation

Anytime you're working with a charitable client and an appreciated tangible asset enters the picture, contact Kitsap Community Foundation early. Public charities like KCF can accept a wide range of noncash assets, provided the assets can be evaluated, valued, transferred, and ultimately liquidated to support your client's charitable goals. The earlier you loop us in, the more options are on the table.

Ask questions beyond balance sheet basics

Clients often arrive at meetings focused on investment statements and real estate, and overlook assets that may carry significant value. Comprehensive discovery conversations matter more than ever as affluent households continue to hold substantial wealth outside traditional portfolios. Clients who are downsizing, simplifying during retirement, or navigating estate planning questions may welcome a charitable strategy that transforms an underused or burdensome asset into lasting community impact. A collection that a client loves but their heirs have no interest in maintaining is worth a conversation.

Build your client’s charitable plan prior to a sale

When you spot an appreciated tangible asset on a client's balance sheet and you know that client is charitable, timing matters. A client preparing to sell an asset that has appreciated significantly could face a substantial capital gains tax bill. Contributing the asset to a fund at KCF prior to a sale may help reduce or eliminate that tax liability, while directing funds toward causes the client cares about. That sequencing, contribution before sale, is one of the most important things advisors can flag early in the process.

Pay attention to the rules around noncash assets

Gifts of tangible assets require careful coordination. Unlike publicly traded securities, these assets involve additional due diligence: title transfers, appraisals, insurance considerations, debt obligations, marketability, and liquidation logistics all require attention. The IRS also imposes specific substantiation and reporting requirements for noncash charitable deductions.

The KCF team is glad to work alongside you and your client's attorneys, CPAs, valuation experts, and financial advisors to determine whether a proposed gift is feasible and which structure makes the most sense. In many cases, KCF can accept the asset directly and manage the sale.

For a charitable client, directing a much-loved collection or appreciated asset toward causes they care about may be far more satisfying than watching it sit in storage, accumulating costs, with no clear plan for what comes next. You can add real value by raising the question: is this asset better suited for charitable planning than for transfer through an estate, particularly when heirs may not share the interest, or the capacity, to manage it?

Conversations like that are where advisors earn lasting trust. Reach out anytime, we're glad to help you think it through.