Now is a Smart Time to Donate Appreciated Stock
Donating appreciated assets to a DAF before year-end is a powerful way to give smarter and give more.
As the year winds down, many of us routinely think about charitable giving — not just as a way to support important causes, but also as a strategic financial move.
Why consider donating appreciated stock this year?
As the market has notched record highs, several individual stocks have seen exceptional market performance. This leaves many investors holding stock that could be worth significantly more than what they originally paid. As such, the next few weeks could be a timely moment to donate appreciated assets, such as stocks and other securities. Donating such assets to the ImpactAssets Donor Advised Fund (ImpactAssets DAF) could help you maximize your positive impact while optimizing your tax benefit.
Making the donation before December 31 ensures the deduction counts for this tax year, which can be especially valuable in a high-income year or after a liquidity event. Questions? Reach out to us.(opens in new tab)
Case Study: Donating Appreciate Assets*
In 2026, donating appreciated assets held for over a year can help reduce capital gains taxes and increase the value of your gift. Consider a founder whose company recently went public. Her 2026 AGI is $15M, and her position has a very low cost basis. She donates $4M of shares with a $200,000 basis to her DAF:
- Capital gains tax avoided: about $904,000 (23.8% federal rate on $3.8M of appreciation)
- Charitable deduction: $4M before the 0.5% floor; after the $75,000 floor, $3.925M is deductible
- Tax value of the deduction: about $1.37M, an illustrative 35% effective benefit rate for this top-bracket donor
- Total federal tax benefit: about $2.28M, combining the estimated deduction benefit with tax avoided on a hypothetical sale. After accounting for the after-tax proceeds she would have received, the gift’s estimated net cost is approximately $1.72 million.
Had she sold the shares first and donated the after-tax proceeds, the charity would have received about $3.1M instead of $4M.
*This case study is entirely hypothetical and provided for illustrative purposes only. It does not depict any actual donor and is subject to Adjusted Gross Income-based limits on deductibility.
Benefits of donating appreciated stock to the ImpactAssets Donor Advised Fund
Give More to Charity
Let’s return to the case study above. If you're planning to make a $4M charitable gift, how you give matters. Selling appreciated stock and donating the cash will reduce what you give to charity, as you will need to pay capital gains tax on your gains first. Donating the stock directly to the ImpactAssets DAF means:
- You may be eligible to claim a charitable deduction for the full fair market value of the donated asset.
- You can help minimize the potential capital gains taxes that may otherwise apply when liquidating those assets.
- By gifting all or part of your appreciated security, you could help rebalance your holdings in a tax-efficient manner.
- More of your intended gift reaches the causes you care about.
Activate Your Capital for Impact From Day One
By contributing to the ImpactAssets DAF now, you not only set aside funds for future charitable gifts, your capital can be directed toward impact from day one.
The ImpactAssets DAF offers unique access to a platform for impact investing, allowing you to invest immediately in line with your values. Unlike other DAFs, where your money often sits in mainstream mutual funds, with ImpactAssets, you can invest in turnkey portfolios with impact at the core as well as companies and projects aligned with your values. Your philanthropic funds have the potential to grow, while you support causes like community development, sustainable agriculture, small businesses and more.
A Note on the One Big Beautiful Bill
The One Big Beautiful Bill Act (OBBBA) introduced several changes to how charitable contributions are treated for tax purposes, and these rules are already in effect. As always, donors should consult their tax advisors regarding their specific circumstances.
For those in the 37% federal income tax bracket, charitable deductions are now capped at 35% of the donation’s value. In addition, a new 0.5% floor is in place, meaning charitable deductions are reduced by 0.5% of a filer's adjusted gross income (AGI). For example, a taxpayer with $1,000,000 AGI would subtract $5,000 from their total charitable deduction. This is why “bunching” cash contributions during high-earning years can be more advantageous than smaller annual contributions. It’s also why we see more cases of appreciated asset donations before a deal closes, since these donations allow the donor to hit the 0.5% floor more easily.
Want to learn more?
Donating appreciated stock to a DAF is a powerful way to give smarter, not just more. As the calendar year closes, consider talking to an ImpactAssets team member today to explore how this strategy can benefit both your portfolio and the causes you care about.
Whether you're looking to optimize your tax liability, simplify your giving or amplify your impact, the ImpactAssets DAF offers a flexible, efficient and values-driven solution.
This does not constitute tax advice. Please consult with your tax specialist before making any donations.
Interested in other year-end giving strategies? Read about different ways to unlock non-cash assets for charity and tax benefits. Learn More
LEGAL AND PROGRAM DISCLAIMER: This is not a solicitation to buy or sell securities, nor a private placement offering pursuant to any private placement memorandum that must be issued to qualified investors. It is an informational description of charitably oriented, social purpose investment options that have been approved by ImpactAssets only for use in its donor advised fund asset base. It is only for use by its donors. This does not constitute tax advice. Please note there are a number of factors to consider when assessing the tax implications of gifts to charity. ImpactAssets does not provide legal or tax advice, nor does it assume liability for the tax consequences of any client. Individuals should consult with a tax specialist regarding the tax implications of employing a tax strategy before investing or making a charitable donation.
Any allocation to private debt and equity investment options may result in losses and illiquidity that will be borne solely by each donor advised fund account with investment in these options, as will associated program fees. Investment minimums apply. Grant making from the principal value will not be possible until distributions are returned to the ImpactAssets Donor Advised Fund. There is no guarantee of any recovery of capital. No assurance can be given that investment objectives or targets/projected returns will be achieved. Actual target may vary and should not be considered or relied on as a performance guarantee. As applicable, Fund Managers have not approved the information contained in the respective Fund profiles, including the assignment of risk ratings contained therein. The Units may be offered solely to, and subscriptions will be accepted only from “Accredited Investors,” as defined in Rule 501(a) of Regulation D promulgated under the authority of the Act, who are also “Qualified Clients,” as defined in Rule 205-3 of the United States Investment Advisers Act of 1940, as amended.
