Donating appreciated stock is one of the most tax-smart and generous ways to give.
Whether your stocks have surged in value, your portfolio needs rebalancing, or you fully maximize your giving to the Boys & Girls Clubs of Monmouth County (BGCM), stock donations offer powerful advantages.
1. Give More Without Paying More
By donating stocks that have appreciated for over a year, you avoid capital gains taxes—up to 23.8% Federal Savings—and still deduct the full fair-market value on your income tax. That means your gift to BGCM goes further, helping you make a bigger impact on Club kids at no additional cost.
2. Make It Easy with a Donor-Advised Fund
A donor-advised fund (DAF) simplifies the process. Donate appreciated stock once, claim a deduction this year, and then recommend grants to your favorite charities over time—all with one tax receipt. (See example chart below.)
3. Reduce Future Capital Gains Exposure
Love a stock but want to minimize future taxes? Donate your appreciated shares, then repurchase the same stock to reset your cost basis. This simple strategy can reduce future tax liability while still supporting BGCM’s mission today.
4. Improve Your Portfolio’s Health
Like your physical health, your portfolio needs regular checkups. Donating stock is a great way to rebalance investments while funding meaningful causes. If you’re holding concentrated positions, this is an opportunity to diversify and leave a lasting legacy Club kids can rely on for generations to come.
5. Use Your IRA to Give Tax-Free (If You’re 73 or Older)
If you’re 73 or older, you can make a Qualified Charitable Distribution (QCD) of up to $100,000 per year directly from your IRA to a nonprofit. This counts toward your Required Minimum Distribution (RMD) and is excluded from taxable income, helping you avoid a higher tax bracket.
6. Leave a Lasting Legacy
Donating stock through your estate plan allows you to support BGCM beyond your lifetime. Legacy gifts of appreciated assets—whether through a will, trust, or beneficiary designation—can significantly reduce estate taxes and ensure your philanthropic values endure.
Tip: To receive a deduction for this tax year, initiate stock donations before year-end, as transfers can take time.
Donating stock helps you give more, save more, and simplify your charitable giving—all while making a lasting difference.
| Example 1 | Example 2 | |||
|---|---|---|---|---|
| Sale of Stock, Then Gift of Proceeds | Gift of Stock, Then Sale by Charity | Difference | ||
| A | FMV | 100,000 | 100,000 | |
| B | Basis | 20,000 | 20,000 | |
| C | Gain (A-B) | 80,000 | 80,000 | |
| D | Top Federal Tax Rate on Gain | 23.8% | N/A | |
| E | Tax on Capital Gain (CxD) | 19,040 | N/A | 19,040 |
| F | After-Tax Proceeds (A-E) | 80,960 | 100,000 | (19,040) |
| G | Donation to Charity | 80,960 | 100,000 | (19,040) |
Examples
The chart above shows two different ways that appreciated investments may be used to benefit charity. The first example illustrates a sale of appreciated shares, followed by a donation of the after-tax proceeds to charity, while the second illustrates the donor’s contribution of the shares to a DAF, which then sells them. In each example, the fair market value (FMV) of the shares is $100,000, the donor’s basis is $20,000, and the donor is subject to a 23.8% tax (top capital gains rate of 20% plus the 3.8% net investment income tax) if they sell the shares themselves rather than contribute them to be sold by a DAF.
