Giving Stock Instead of Cash: Letting More Reach the Ministries You Love

Why the asset you give can matter as much as the amount, and how appreciated stock changes the math.

Most generous people give with a check or a card. It is simple and it feels direct. But if you own stock or other assets that have grown in value, writing a check may be the more expensive way to give the same amount. This is one of the most overlooked parts of charitable planning, and a donor-advised fund makes it easy to use.

How the Rule Works

When you give an appreciated asset you have held for more than one year directly to a public charity, including a donor-advised fund, two things generally happen. First, you can deduct the full fair market value of the asset, not what you paid for it. Second, neither you nor the charity pays capital-gains tax on the growth.

Compare that with selling the stock first. If you sell, you owe capital-gains tax on the growth, usually at a federal rate of 15% or 20%, plus the 3.8% net investment income tax for some higher-income filers. Only what is left can go to charity.

A Simple Illustration

Say you bought shares years ago for $20,000, and today they are worth $100,000. You want to give $100,000 worth of generosity this year.

Path one: sell the shares, then give cash. You have an $80,000 gain. For illustration, assume a combined federal rate of 23.8% on that gain, or $19,040 in tax. You could give the $100,000 in cash, but you would still owe the tax on the sale.

Path two: give the shares directly to your donor-advised fund. The fund receives the full $100,000 in value and can sell it without paying capital-gains tax. If you itemize, you generally deduct $100,000, subject to the 30% of AGI limit for appreciated assets, and the $19,040 tax bill from the sale never comes due.

State taxes, your bracket, and the 2026 rules (the 0.5% of AGI floor for itemizers and the 35% cap on the benefit for top-bracket filers) all change the real numbers. The shape of the comparison stays the same: giving the shares directly avoids a tax that selling first would create.

One honest reminder: giving always costs you more than it saves. A deduction lowers your tax by a fraction of the gift, never the whole gift. Give because you want the money to do good, and let the tax rules make that generosity go further.

Details That Matter

Hold it more than a year. Assets held one year or less are generally deductible only at the lower of what you paid or their current value.
Do not give your losers. If an investment has dropped in value, it is often better to sell it, take the loss on your own return, and give the cash. Ask your CPA.
Mind the 30% limit. Appreciated assets are generally deductible up to 30% of AGI in a year. Anything above that can usually be carried forward for up to five years.
Transfers take time. Moving shares from a brokerage account to a sponsor can take days, and sponsors often set earlier year-end deadlines for stock gifts than for cash.
Private assets are different. Some sponsors accept privately held business interests, real estate, or other complex assets. A qualified appraisal is generally required for noncash gifts over $5,000 (for non-publicly traded stock, over $10,000); publicly traded securities do not need one. Each sponsor has its own review process.

Why It Matters for Business Owners

Business owners often hold wealth in forms other than cash: company stock, shares in a brokerage account built from years of profit, or interests in real estate. When a big giving year comes, the instinct is to reach for the checking account. Pausing to ask which asset to give can mean more reaches the ministries you care about, from the same generosity.

A donor-advised fund helps because many sponsors are set up to receive stock and other assets, sell them inside the fund, and let you recommend grants in cash to churches and ministries that could never process a stock gift themselves. Your local church may not have a brokerage account. Your fund can bridge that gap.

Questions to Bring to Your CPA

Which of my holdings have the largest long-term gains?
How much can I give in appreciated assets this year before I hit the 30% limit?
How do the 2026 floor and the 35% cap affect my situation?
Would it make sense to give some cash and some stock?