Donate Appreciated Stock – A Tax-Smart Giving Strategy

Unlock Tax Benefits and Maximize Charitable Impact

Americans have a long-standing tradition of generosity, a trend that continues today. According to Giving USA, charitable giving in 2024 outpaced inflation for the first time in three years, an encouraging sign of continued generosity.

Smart Giving Beyond Cash

A striking number of donors support their important causes by pulling out their checkbook or credit card and contributing, often once a year to an annual appeal, from their discretionary income.

More donors are realizing that giving beyond cash – such as donating appreciated stock – is a smart, tax-efficient strategy that is easier than many expect.

In 2025, with tax laws continuing to favor strategic donations, donating appreciated stock to a donor advised fund (DAF) is one of the most efficient ways to be both tax-smart and amplify charitable giving.

What Are Appreciated Assets?

Appreciated assets are investments that have increased in value since they were acquired.

To illustrate:

• Stock purchased for $10,000 in 2017
• Now worth $50,000 in 2025
  • $40,000 growth ( the “appreciation” )

Examples of Appreciated Assets

There are many types of appreciated assets, including:

• Publicly traded stock: Shares in companies listed on exchanges like the NYSE or NASDAQ that have risen in value.
• ETFs (Exchange-Traded Funds): Baskets of stocks or other assets that track market indices and have appreciated over time.
• Closely held stock: Shares in private companies, which can be more complex but offer similar benefits when donated properly.
• Mutual funds: Pooled investment vehicles that may have gained value through market performance.

Pay close attention to how long an appreciated asset has been owned.  Contributing an appreciated asset only makes sense when the asset has been held for more than one (1) year because there is a valuation difference.

• If the appreciated asset is held under one (1) year, the valuation is cost basis.
• If the appreciated asset is held more than one (1) year, the valuation is fair market value.

For families with significant wealth tied up in illiquid assets like real estate or private business interests, these also qualify as appreciated assets. Still, stock remains one of the simplest and most accessible options.

Donating Appreciated Stock to Charity

Donating appreciated stock flips the script on traditional cash gifts. Instead of selling your shares—triggering capital gains taxes that could eat up 15-20% or more of the sale proceeds and then donating the after-tax proceeds, it is much more tax efficient to contribute the stock directly to your DAF or favorite charity.

This preserves the appreciated stock’s full value for charity while giving you an immediate income tax deduction for the stock’s fair market value (up to 30% of your adjusted gross income for public charities like DAFs (with any excess carried forward for up to five years). The charity or DAF receives the asset tax-free and can sell it without owing any capital gains taxes, ensuring that every dollar supports your charitable giving goals.

Whether you’re clearing out a concentrated position in your portfolio or want to support multiple causes without the hassle of writing checks to multiple individual charities, appreciated stock donations offer flexibility and efficiency.

How Do I Donate Appreciated Stock to Charity?

The process of using a DAF at iGiftFund is straightforward. This iGiftFund resource provides a roadmap for contributing a variety of assets, including appreciated stock.

So in wrapping up, are appreciated stock donations really tax-deductible?

Yes, donations of appreciated stock to qualified public charities, including DAFs, are fully tax-deductible at fair market value, provided you’ve held the shares for more than one (1) year.

This double benefit—income tax savings plus avoiding capital gains—can significantly boost your giving power.

Keep in mind that deduction limits apply, and complex situations (like pre-arranged sales) could jeopardize deductibility. Always consult a qualified tax advisor or CPA for personalized guidance.

Be the Financial Advisor who understands donating appreciated stock

Financial advisors who include philanthropic considerations in their conversations with clients are wise and forward-thinking.

According to Philanthropy.org, “Donors aren’t just chasing tax write-offs. They’re seeking meaningful impact, long-term strategy, and multigenerational planning.” They are also seeking financial advisors who understand “non-cash giving vehicles” – such as appreciated stock, real estate, and cryptocurrency..

Contact iGiftFund – Our experienced professionals are here to assist and provide insights on seamlessly integrating DAFs into your practice.