Appreciated Stocks

The Gift That’s Already There

Many donors still give with cash simply because it is the default. But for donors who own appreciated stock, donating shares directly can often be a more tax-efficient and impactful way to make a gift. The core message is simple: the money is often already there, but the right question has not been asked.

One longtime donor case makes the point well: A donor had supported an organization faithfully for decades and wanted to fund a scholarship endowment, but cash flow made the gift feel out of reach. When asked whether she had ever considered giving appreciated stock, she immediately realized she could make the gift and funded the endowment quickly. That story illustrates the power of matching the donor’s situation with the right gift vehicle.

What Appreciated Stock Means

Appreciated stock is stock that has grown in value since it was purchased. The original purchase price is the cost basis, while the current value is the fair market value. If the donor sells the stock first, the appreciation can trigger capital gains tax; if the donor gives the stock directly, the charity receives the full value, and the donor may avoid that tax on the appreciation.

A simple example helps clarify the difference:
  • Sell stock first, then give cash: the donor may owe capital gains tax before making the gift.
  • Give stock directly: the nonprofit receives the full fair market value, and the donor may receive a charitable deduction based on that value.
  • The longer the stock has been held, the more attractive this option becomes for the donor.
Man sitting at a desk, looking thoughtful with hand on chin, in front of a laptop and paperwork.

Why Timing Matters

This strategy works best with long-term holdings. Stock held for more than a year is generally treated as long-term appreciated property, which is the key threshold for tax advantages. If the stock has been held for less than a year, the donor may not receive the same benefit, so confirming the holding period is essential.


For nonprofits, the practical question to ask is straightforward: has the donor held the stock long enough for the gift to qualify as long-term appreciated property? If the answer is yes, the door opens to a more efficient and often more generous gift.

Tax and Deduction Basics

For public nonprofits, gifts of appreciated stock are generally deductible up to 30% of adjusted gross income, with unused deductions often carried forward for up to five years. Cash gifts typically have a higher deduction limit, but appreciated stock can still be more advantageous because the donor may avoid capital gains tax while giving the same or greater value.

Newer 2026 rules affecting itemized cash deductions make non-cash gifts even more attractive in many cases. Stock gifts can help donors clear deduction thresholds more efficiently while supporting larger charitable goals.

What Nonprofits Need

Organizations should make sure they are operationally ready before promoting stock gifts. That means having a brokerage account or a clear process through a community foundation or service provider, plus a gift acceptance policy that explicitly covers publicly traded stock, valuation, and liquidation timing.

A strong processs should include:

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A brokerage account or outside partner ready to receive gifts.

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A gift acceptance policy that names publicly traded stock and explains how it will be handled.

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A plan to liquidate stock promptly after receipt.

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Clear internal instructions so front-line staff know whom to contact and what information to collect.

Acknowledgment and Valuation

For accounting purposes, publicly traded stock is usually valued at the average of the high and low price on the date the nonprofit receives the gift. The acknowledgment letter should confirm the stock gift, including the ticker symbol, number of shares, and date received, but it should not state the dollar value.

That distinction matters because the nonprofit is confirming receipt, not assigning the donor’s tax value. The donor and their advisor can calculate the deduction using the market value on the gift date and their own tax circumstances.

Who to Watch For

The best prospects are often long-tenured donors whose giving has stayed steady over time and who may have mentioned a taxable event, retirement, or a major financial change. These donors may have appreciated assets sitting in plain sight, even if they have never thought of using them for philanthropy.

A helpful question is simple and non-threatening:
“Have you ever considered giving with appreciated stock?”

That phrasing works well because it introduces the idea without assuming anything about the donor’s finances. It invites reflection and gives the donor room to bring the idea back later after speaking with an advisor.

Marketing approach

The most effective messaging leads with the donor, not the vehicle. Instead of opening with tax jargon, tell a story about someone who wanted to make a meaningful gift and found a better way through appreciated stock. That framing helps prospects think, “Someone like me could do this too.”

Three Moves You Can Make This Week

Review your readiness

Ensure your brokerage account is active and that transfer instructions are on file. Revisit your gift acceptance policy. Does it clearly cover securities, valuation, and liquidation? If not, make updating it a priority.

Assess your portfolio

Identify 3-5 donors who fit the profile: long-standing supporters with level giving and any indication of financial sophistication. Flag them for outreach. Shift the question from “Will you give stock?” to “Have you ever considered giving appreciated stock?”

Strengthen your marketing approach

Gather a real donor story to feature in your next email or mailing. Confirm your website clearly states that you accept stock gifts. The opportunity needs to be visible before donors can act on it.

Interested in learning more? Contact us today!

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