How to Gift Stock to Charity (And Save More on Taxes)

Most donors know they can give cash to their church or favorite ministry. Fewer realize there is a smarter way to give that can increase both the size of the gift and the tax savings that come with it: donating appreciated stock.

If you own stock that has grown in value, gifting it directly to a charity instead of selling it first can help you give more, save more on taxes, and simplify the entire process. Here is how stock gifting works and why it matters.

What Does It Mean to Gift Stock to Charity?

Gifting stock means transferring shares you own directly to a charity or a donor advised fund (DAF), rather than selling the shares yourself and donating the cash proceeds. This strategy is one of the most effective ways to support the causes you care about while reducing your tax bill.

Why Donating Appreciated Stock Beats Giving Cash

When you sell stock that has increased in value, you typically owe capital gains tax on the profit. That tax bill means less money ultimately goes toward the ministries and causes you support.

When you donate the stock directly, before selling it, a few powerful things happen: the charity receives the full value of the stock, since no capital gains tax is owed on the transfer; you can deduct the full fair market value of the stock on your taxes, if you itemize; and you give more and save more on taxes compared to selling the stock first and donating what is left.

This is why gifting appreciated stock has become one of the most popular charitable giving strategies among donors, financial advisors, and ministry leaders.

A Real World Example of Stock Gifting Tax Savings

Imagine a donor owns stock worth $250,000 that was originally purchased for $125,000. They have held the stock for more than a year and want to support a few favorite ministries.

Option 1: Sell the stock, then donate the cash. The donor owes capital gains tax on the profit, which reduces both the size of the gift and the tax deduction.

Option 2: Gift the stock directly to charity. The full $250,000 goes toward the donor's charitable causes, and the donor can deduct the entire fair market value while avoiding capital gains tax altogether.

The result is a larger gift to the ministries the donor cares about, along with significantly greater tax savings — often tens of thousands of dollars more than selling the stock first.

Key Rules for Donating Appreciated Stock

Before gifting stock to a charity or donor advised fund, keep these basics in mind.

Hold the stock for more than one year. To deduct the full market value, the stock generally needs to have been owned for more than 12 months. Transfer the stock directly — shares should move straight from the donor's investment account to the charity's account or donor advised fund before the stock is sold. Itemize your deductions, as the tax deduction for gifting stock only benefits donors who itemize on their tax return. Know the annual limits: deductions for gifts of appreciated stock to public charities are generally capped around 30 percent of adjusted gross income each year, and any amount above that limit can typically be carried forward for up to five years.

Is Gifting Stock Right for You?

Donating appreciated stock is one of the most effective and most overlooked charitable giving strategies available today. If you hold stock that has grown in value and have a heart for generosity, this approach could mean a bigger gift for the causes you love and meaningful tax savings for you.

Want to talk through what stock gifting could look like for your situation? Contact us today to learn more about giving appreciated assets through Bridging the Gap.