Donating Stock to Charity

Donating Stock to Charity

Donating to charity helps nonprofit organizations make a difference in the world, but did you know it can also be beneficial to you? While people normally donate cash to charities, donating stock is a smart alternative that also has incentives for your personal finances. Here’s how (and why) to donate stock to charity.

In order to donate stock to charity, it must be stock that you have owned for over a year and has appreciated during the time you’ve owned it. Donating appreciated stock to charity is beneficial for two major reasons: 

No Capital Gains Tax - Capital gains tax doesn’t apply to charitable donations, so you can maximize your donation by donating appreciated stock directly to charities. If you sold your stock for its current market value and then donated the money to charity, you would have less money to give because of the capital gains tax that would be taken out. This way, the charity gets more assets and you get tax benefits.

Tax Benefits - When you donate stock to a charity instead of selling it and donating cash, you are giving more and can therefore claim a higher deduction on your taxes than you could have if you sold your stock first and then donated cash.

If you donate stock to charity, you will need to report the stock donation with Form 8283 and include it with your tax return. The IRS offers more instructions for navigating this process. 

Donating stock can be a bit complicated, but the first step is to contact the charity you are donating to find out if they have a brokerage account that accepts stock shares as donations. If they do, you’ll need their account information and, with it, your financial institution will be able to help you transfer your stock shares.

Another option for helping charities is by adding them to your will and making them part of your legacy. You can leave assets in numerous ways, including a specific monetary sum, a percentage of your estate, or the residue of your assets, with some even having tax advantages for you and your estate.

The Palestine Children’s Relief Fund serves vulnerable communities throughout Palestine and the Middle East. Through our work, we build medical departments for children, sponsor orphans in Gaza, feed hungry refugee children, and provide surgery for thousands of injured and sick children. PCRF relies on charitable donations, both cash and appreciated stock, to continue our mission. There are many ways you can get involved and advance important humanitarian work.