Introducing Stock Contributions in Charityvest: Part 2 — Why Stock Giving is So Smart

November 17, 2020
Strategic philanthropy

🤓 If you have appreciated stock, it’s always smarter to give the stock than cash.

Building on our previous post, we want to explain why stock giving is so smart.

If you have stocks that:

  • You’ve held for more than 1 year,
  • Have appreciated in value,

It is always superior to give stock than cash. Here’s why below.


📈 When stocks grow in value, you must pay taxes on the gains, but not if you donate them.

In the US, we must pay taxes on assets that have gone up in value (like stocks, ETFs, and bonds) when we sell them and realize a “gain.” These taxes are called “capital gains tax.”

After holding the asset for more than 1 year, the “long-term capital gains tax rates” go into effect. In 2020, if your income is more than $53,600, you’ll pay a 15% tax on any asset gains. And if your income is more than $469,051, you’ll pay 20%. You are also (potentially) subject to other Medicare and state-level taxes on asset gains as well.

Even if you want to hold a stock for a long time, you’ll have to sell it at some point and pay the tax on any gains.

If you donate the stock, however, you won’t have to pay any tax. You get to realize a donation of the entire market value of the stock when it's donated.

Here’s an example:

A donor intends to donate $100,000, and the donor can either donate cash or some appreciated stock currently valued at $100,000 with a cost basis of $50,000. If the donor sells the stock, it will incur a substantial capital gains tax because of how well it’s appreciated in value. Illustrated below, a particular donor in the 20% capital gains tax bracket would lose nearly $12k, just on their federal taxes. They could put $12k more to charity by donating this asset instead of selling it first—and they get a larger deduction on their income taxes.

Donating your stocks that have appreciated can be worth thousands of dollars to you and the charities you support. The advantages, though, apply whether you’re making a large gift of many shares, or a small gift of a single share. Also, these tax savings on capital gains tax are available to anyone, even if you will take the standard deduction on your income taxes. 

So, if you have stocks that have risen in value, and you want to give to charity, it’s always optimal to donate stock instead of cash.

Note: if you have only have stock that you’ve held for less than one year, or that has decreased in value, you are better off donating cash. You can deduct asset losses on your income taxes.


📊If you will itemize your deductions on your income taxes, the benefits of donating appreciated stock are even greater.

When you donate a stock, you get to deduct the entire market value of the stock at the time it was donated. If you sold that stock first, you’d only be able to deduct the cash given from the sale, net of taxes and fees.

This can help lower your tax liability on your income, especially if you plan on taking advantage of the bunching tax strategy.

For more on tax liability and how it affects charitable giving, read our guide for year-end giving.


👉Even if you’re not quite ready to sell your best stocks, you can donate them and repurchase your position(s).

If the stocks you’d like to donate might be real winners and you think they could continue to increase, you might be reluctant to donate your best stocks and lose them. However, you always have the option to reduce tax liability in your portfolio by donating your most appreciated positions and immediately repurchase them in your portfolio. This allows you to have the same portfolio, but you’ve harvested gains on your best positions without paying taxes on them.


😊Charityvest is the most flexible way to donate stock.

Rather than committing to a single charity right now or performing multiple stock gift transactions, you can donate the stock into your Charityvest Fund. You’ll enjoy the immediate tax benefit of donating the stock, and you can grant the donated money to any charity—at any time—from your fund. There are no fees to do so either.


🙋We'd love for you to participate in our early access launch and qualify for a $50 bonus.

  • Sign up for early access to give stock and you’ll qualify for a $50 bonus in your Charityvest fund. Submit your contribution before Tuesday, December 1, and we’ll put $50 in your Charityvest fund as a bonus once we’ve processed your gift. (Note: we’ll only be able to provide the bonus to the first 50 stock donors!) Sign up here!
  • Know a charity that might want us to process a few year-end stock gifts for them? We’d love to get in touch with them. If they’d value a free, simple way to help their donors process stock donations, we’d be happy to serve them. Put us in touch!

Create your Charityvest giving fund—it's free and takes 90 seconds.

Stephen Kump

Stephen is the chief of promoting generosity @ Charityvest. Former Bain consultant, philanthropic advisor, and military officer. Yale MBA.

© 2019-2020 Vennfi, Inc. Portions © 2016-2020 Charityvest, Inc.