Now is a Smart Time to Donate Appreciate Stock
Donating appreciated assets to a DAF before the 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 is this year different from other years?
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. Additionally, anticipated changes in tax law through the One Big Beautiful Bill Act, makes the next few weeks 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.
Case Study: Donating Appreciate Assets*
*This case study is entirely hypothetical and provided for illustrative purposes only. It does not depict any actual donor.
Benefits of Donating Appreciated Stock
1. Give More to Charity
Let’s return to the case study above. If you're planning to make a $25,000 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.
2. Optimize Tax Benefits Before Year-End – Impact of the One Big Beautiful Bill
Several changes to tax legislation related to charitable contributions are slated to go into effect in 2026 under the One Big Beautiful Bill Act (OBBBA), making these last few weeks of 2025 a strategic window for donors to make the most of the current more favorable rules on charitable giving.
For those in the 37% federal income tax bracket, beginning in 2026, charitable deductions will be capped at 35%. In addition, a new 0.5% floor will be put in place where charitable deductions only count when made above 0.5% of a filer's adjusted gross income (AGI). Therefore, if a taxpayer has $1,000,000 AGI, they can only deduct the portion of their giving that is above $5,000.
In other words, if your taxable portfolio experienced a large increase as a result of the market and you intend to donate to charity, donating appreciated stock before December 31st can amplify your impact and the tax benefit of your gift. As always, donors should consult their tax advisors regarding their specific circumstances.
3. 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 starts working for 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. Even while your philanthropic funds grow, you can support causes like community development, sustainable agriculture, small businesses, and more.
Want to learn more?
Donating appreciated assets 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.
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.
