overview

• The most tax efficient way to donate is stock donations

• Donors have given which has grown the most lately due to its many benefits is stock donations. 

• Many donors in 2020 and 2021 will seek to optimize their giving because of fewer earnings but more desire to help.  

• In 2018 alone, stock donations reached up to $21 billion, growing 62% compared to 2017.

Stock donations is the process of giving appreciated company stock, ETF, or other security to a charity. This process is extremely popular amongst the financially savvy and wealth advisors. We pulled every charity 990 filing the last 2 completed tax years and found in 2018, there were $21.07 billion dollars of stock donations completed in the United States. This is a record number, jumping 62% from the previous year. Stock giving is far more popular than the close counterpart, cryptocurrency giving, that has actually gone down year over year. 

Giving stock offers two types of tax benefits. Gifts to 501(c)3 charities provide an itemizable deduction that reduces the total taxable income on an individual’s tax return. In addition, when giving stock, the appreciation taxes are removed. If you sold those same securities, you could be taxed up to 40% in some states.

Here’s an example to illustrate the benefits. Justin is a high-income earner, and he is planning to give $15,000 to his local YMCA. He also is an long-term investor and buys the index fund ETF, VTI, with his savings. The lowest price he paid was $107 a share from 5 years ago when he bought 100 shares. It trades around $150 today. If he were to sell those holdings, he would have a taxable income of $4,300 and owe the government $1,550. For the same donation, if he used Cocatalyst to give the VTI stock to the YMCA, he would be ahead $1,550. Donating with Cocatalyst is still a tax-deductible transaction.

Cocatalyst makes stock donation fast and easy. Donating stocks old fashion has many steps from calling your broker, calling your charity for account information, filling out paper forms, faxing those forms, following up with the charity if the transaction completed, and waiting until year-end for your tax receipt. Cocatalyst makes this process easy and entirely online. It’s safe and secure with all personal data deleted after the transaction is completed and encrypted.

Make a stock gift today by visiting www.cocatalyst.org/start-donation. If you’re a charity and want to accept stock gifts on your website, sign up for free at www.cocatalyst.org/for-charities.