What’s the Deal with Donating Savings Bonds?
Have you ever been approached by a donor who wants to donate United States savings bonds? Sounds like a wonderful idea, doesn’t it? The donor probably purchased or received the bonds many years ago and they are reluctant to cash them in due to the associated income tax on the earnings. Why not donate them?
Unfortunately, giving options for savings bonds during a donor’s lifetime are limited. They are non-transferrable by order of the United States Treasury – except in very limited situations that don’t include gifts to charity.
Savings bond owners can name a charity as a beneficiary of the bonds, in which case ownership of the bonds will transfer to charity at their death. A lifetime gift isn’t possible without re-issuing the bonds in the name of the charity and the owner recognizing the accumulated earnings on the bonds. A gift at death will usually allow the donor to bypass any associated gains.
If a donor wants to name charity as beneficiary of their savings bonds, it’s probably best that they:
- Convert any paper certificates to electronic versions; and
- Share the serial numbers of all certificates of which they plan to name your charity beneficiary.
To name charity as a beneficiary, they will need vital data, including the Federal Tax ID Number – and possibly additional information. Instructions for naming a beneficiary on savings bonds can also be found online. Here’s a link.
Information, such as the accumulated value of savings bonds, can be easily acquired for Series EE, Series I, or Series E paper bonds at TreasuryDirect.gov.
In the end, giving US savings bonds to charity is possible – if done correctly.