When Generosity and Wisdom Meet: Donating Appreciated Stock
At The Hope Effect, we’ve seen firsthand how donors use creativity and generosity to make an even bigger difference in the lives of children waiting for families. One strategy we often hear about is giving appreciated stock instead of cash, especially when your investments have grown and you were already planning to give.
That might sound a little technical, so let us walk you through how it works in real terms, not legalese, using an example you might relate to. But first, remember that we’re giving this to inform and inspire, not to advise. Always talk with your tax or financial advisor before acting.
A Real-World Example
Suppose it’s late in the year, and you decide you want to give $10,000 to The Hope Effect. You also own a stock that has appreciated, meaning its current market value is $10,000 more than what you originally paid for it.
If you sold that stock, you’d owe capital gains tax on the $10,000 gain.
But if you instead donate the stock directly to The Hope Effect, here’s the beauty: you may avoid paying capital gains tax on that gain, yet still secure a charitable deduction depending on your situation and tax rules.
Then, if you still like holding that investment, you could use cash that you might otherwise have given to repurchase the stock, resetting its cost basis.
In other words, you give $10,000 in impact to mission, reduce a tax bill, and potentially keep your investment position, all with the same intended gift.
It’s not magic. It’s thoughtful generosity.
Why Some of Our Donors Do This
Over the years, a few donors have shared how they’ve used this strategy. A couple of takeaways we’ve heard:
More of the gift reaches children. Less is lost to taxes, meaning more support toward bringing kids into families.
Peace of mind. Donors like that they can stay invested while fulfilling their calling to give.
Encouragement to others. When people see creative giving, it often sparks conversations and more generosity.
We love that generosity doesn’t always look the same. For some, it’s monthly gifts. For others, it’s gifts of stock. What unites them is the heart to see children flourish in families.
A Few Things to Keep in Mind
We cannot give you tax or financial advice. This is purely educational.
Whether this strategy works depends heavily on your personal tax situation, including holding period, income, and your state.
Your advisor can help you determine whether donating appreciated stock is more beneficial than giving cash, given your overall financial picture.
The mechanics are straightforward. Once your advisor gives the go-ahead, our team can walk you through how to transfer shares to The Hope Effect.
If this possibility piques your interest and you’d like help understanding how to gift stock or explore whether it might be a fit for you, we’d be honored to talk with you. You can reach out to me directly, or visit our More Ways to Give page.
Thank you for partnering with us, not just in giving, but in giving wisely. Because when generosity is thoughtful, the impact is that much greater.
Together, we are changing the way the world cares for orphans—because every child deserves a family.