Should You Donate Special Assets?

Further to my visit with Mr. Moskowitz a couple weeks back, the topic of donating assets to charity came up. Mr. Moskowitz, whose insights are always, well, incisive, is of the opinion that, if you have a special asset that has value, and you have a favorite charity or charities, the charity would be better served if you sold the asset and donated the cash.

Let's say you have a collection of rare books, and, as a bibliophile, you love the library. A good fit, yes? Donate the collection to the library. But is it a good fit? What most libraries need is money, not more books. Chances are your local library's facilities are too small as it is, and probably cannot handle the extra books. What they really need is more money to buy more shelves, fix that leaky roof, replace those old computers. The library may have nowhere to put the books, and my just stuff them in some damp corner in the basement, or worse, dispose of them. There was a minor controversy when the San Francisco Public Library moved to its new facility. It actually had less shelf space for the books, and many books, including rare first editions, were simply thrown away. It happens.

Another factor is administration. The process of transferring the books to the library may not be as easy as it seems. What if the library rejects the gift? They not want more books, but I cannot imagine they would turn down cash. Also, what if your collection is gone by the time you die (maybe it was stolen, or it went up when the house burned down)? Gifts of specific items are always fraught with administration headaches.

There are, of course, situations where donating a special asset makes sense. If, for example, you have a rare Bugatti (I guess they're all rare), and the Blackhawk Auto Museum has been chomping at the bit to have the car for years. That donation makes sense, and avoids many of the problems above.

You are likely very attached to your collections. The idea of having them live on in an institution you admire is certainly a noble sentiment. But thoroughly consider whether the institution is in a position to accept your collection, whether they are in need of money instead, or are even able to fully appreciate the significance of your largess. They may be better off with the cash.