Cost of Gift

Cost of gift is the donor's out-of-pocket cost of funding a gift.

For example, if a donor funds a gift with $10,000 and the charitable deduction from the gift saves the donor $2,000 in income taxes, the donor's out-of-pocket cost to make the gift is $8,000 ($10,000 - $2,000). The amount of tax savings equals the charitable deduction multiplied by the donor's income tax bracket.