Most people give to charity by writing checks. It feels familiar, quick, and safe. But once you’ve held investments for many years, writing a check can quietly become the least efficient way to support the causes you care about. For families who value stewardship and want their generosity to be both meaningful and responsible, that inefficiency can feel frustrating.

Donating appreciated securities offers a simple alternative. It lets you support charities in a tax-efficient way without increasing the amount you give. Once you understand how it works, it often becomes one of the easiest tools for blending generosity with financial clarity. This approach also fits naturally into a broader framework for tax-smart giving.

Why appreciated securities can be so effective

Selling investments that have grown triggers capital gains tax. Donating those same securities directly to a charity avoids that tax entirely. The charity receives the full value, and if you itemize deductions, you can deduct the market value of the gift.

Beyond the tax benefit, this approach tends to resonate with families who want their giving to reflect their values. It reduces friction in your financial life, preserves cash for other goals, and turns long-held investments into something that supports the causes you care about.

It also lines up well with purpose-first planning. When you anchor your giving in the values that guide you, the mechanics of your charitable giving become more clear cut.

Families often appreciate this approach because it:

• reduces future capital gains
• helps charitable dollars go further
• keeps investment allocations more balanced
• supports generosity without adding complexity

It’s a quiet, thoughtful way of giving that aligns with responsible stewardship.

When this strategy makes sense

Donating appreciated securities tends to be most helpful when:

• you hold investments in a taxable brokerage account
• those investments have grown meaningfully over time
• you already plan to give in a purposeful way
• you want to trim oversized positions without triggering gains

Many families find a rhythm by reviewing taxable accounts each year, identifying appreciated shares, and using them to fund charitable goals that fit within their charitable giving plan.

How it compares to other common ways of giving

Understanding how this approach fits among other options can make decisions feel simpler and more grounded.

Cash gifts
Cash is simple and familiar, but it often does less good because you spend after-tax dollars and miss the chance to avoid capital gains.

Qualified charitable distributions (QCDs)
For IRA owners over 70½, QCDs reduce taxable RMD income and work well alongside appreciated securities. The mechanics and benefits are explained in a practical guide to using qualified charitable distributions from your IRA[Qualified Charitable Distributions: The Smartest Way to Give From Your IRA].

Donor-advised funds (DAFs)
DAFs can make the logistics easier, especially when you want to support several charities or give over multiple years.

Charitable trusts
For larger or long-term giving strategies, charitable trusts may come into play. Most families won’t need that level of complexity, they can be useful tools in certain situations.

A simple example

Imagine you want to give $8,000 this year.

You could write checks. Or you could look at a mutual fund you purchased long ago for $12,000 that is now worth $30,000. If you donate $8,000 of those mutual fund shares:

• you avoid capital gains on that portion
• the charity receives the full $8,000
• your cash remains available for other needs
• you can reinvest in a more balanced allocation

The charitable impact is the same, the financial cost is lower, and your overall picture becomes a little more clear.

Many families have a moment when this “clicks” – when generosity and financial stewardship start working together rather than competing.

If you’d like help deciding whether appreciated securities fit into your own giving plan, a short conversation often brings quick direction.

How to execute the gift without stress

Once you know what to expect, the mechanics are simple.

Confirm the charity can accept securities
Most larger nonprofits can. Smaller ones sometimes cannot. A donor-advised fund can act as a reliable workaround.

Request a transfer through your custodian
Your custodian will provide a short form requiring the charity’s account and DTC information.

Start earlier than you think
Transfers can take several days, especially late in the year. The gift is counted on the day shares leave your account, so make sure that you are aware of any deadlines (like the end of the year).

Keep your documentation
You’ll receive both a transfer confirmation and a charitable receipt. Keep both with your tax records.

Consider a DAF for recurring gifts
If giving appreciated securities becomes part of your regular plan, a DAF can simplify the process and support multi-year intentions.

Pitfalls to be aware of

You don’t need to memorize these – just be aware of them.

• Don’t donate positions with losses; you lose the tax benefit.
• Avoid late-December transfers; delays can push the gift into the next year.
• Make sure you’ve held the asset at least one year.
• Double-check the charity’s account details.
• Remember this applies only to taxable accounts.

These small points help keep the process smooth and low-stress.

How this fits into a broader giving plan

Appreciated securities often work best as part of a simple mix that reflects your goals and values:

• QCDs for IRA-based giving
• appreciated securities for larger or planned gifts
• cash for smaller or spontaneous giving
• DAFs for batching multi-year commitments
• estate tools for long-term charitable wishes

If charitable giving is part of how you want to shape your legacy, it can be helpful to understand how lifetime giving interacts with estate decisions.

Generosity often feels most satisfying when it fits into a well thought out plan that supports both your intentions and your long-term security.

Common questions

What if I still prefer giving cash for smaller gifts?
That’s completely fine. Many families use appreciated securities for planned or larger gifts and keep cash for spontaneous ones. It can help to sketch out a simple structure for annual giving and focusing on the overall purpose behind your giving.

Can this strategy work alongside other ways of giving?
Yes. Appreciated securities are often paired with QCDs for IRA-based giving and with donor-advised funds for multi-year commitments. These combinations tend to appear naturally when families use the framework in a practical guide to tax-efficient ways to give in retirement.

Does this help with legacy planning as well?
Often it does. Donating appreciated securities can reduce future capital-gains complexity and clarify what you want to leave to heirs or charities. These ideas connect well with the broader considerations in our article on keeping charitable giving aligned with your estate plan.

Is this strategy too complicated to manage on my own?
Not usually. Most families use it once or twice a year with little difficulty. It only becomes more complex when the strategy expands into multi-year or higher-impact giving structures, such as those described in a clear guide to creating a clear and meaningful charitable giving strategy for retirement.

Final thoughts

You don’t need to give more than you already plan to give. You don’t need to take on complexity. And you don’t need to overhaul your finances.

Donating appreciated securities is simply a thoughtful way to stretch your giving further. It reflects quiet generosity, responsible stewardship, and a desire to make an impact without waste.

If you want a clearer, values-driven way to think about charitable giving as part of your broader financial life, our free workbook – Giving With Purpose – can help.