Donating Stock is Smart and Simple

The end of the calendar year is a critical time to examine your charitable giving options.

Uncertainty often causes people to delay their charitable giving decisions and, in the wake of the recent tax law changes resulting from the One Big Beautiful Bill Act (H.R. 1), many people are unsure about how to move forward with their year-end giving. 

When it comes to choosing the way you support the causes that mean the most to you, consider focusing less on what is unknown and more on what you can be sure about.

Donating stock and securities directly to a qualified charity, such as Drexel University, is still the smartest option for charitable giving—in 2025 (and beyond).

Here are some reasons and a tip to consider:

Donating stock removes a tax liability from your portfolio

Donating appreciated stock to charity eliminates any potential capital gains tax liability from the appreciation in the stock. Federal capital gains taxes can be as high as 20%. If you factor in the 3.8% Medicare tax on investment income, you could be on the hook for up to 23.8% in federal capital gains (and possibly state capital gains tax in some states) if you choose instead to sell your stock and donate the cash proceeds.

If you itemize, there’s an immediate extra tax benefit for you

In fact, it’s one of the most generous deductions in the current US tax code. As long as the donation is to a qualified charity, you can take a tax deduction for the full fair market value of the donated shares (up to 30% of your adjusted gross income), regardless of what you originally paid for them.

Donating stock can increase the impact of your gift

When you give shares of appreciated securities directly to a qualified charity, such as Drexel, your gift can be significantly larger because you’ll avoid the taxes you would incur from selling and donating the cash. This means more support for whatever department or program or initiative you choose.

You may be able to find a better use for your cash

Consider this tip: Donate appreciated stock from your portfolio and then buy shares of the same stock that you gifted. Purchasing it at the current, higher cost basis will lower your potential tax liability down the road.

Donating stock is a fairly simple process

When it comes to making a difference, remember that what you give may be just as important as how much you give.

If you have questions about making stock transfers as a powerful charitable giving strategy, we’re happy to help. Contact David Toll, JD, senior associate vice president, Drexel University Office of Gift Planning, at 215.895.1882 or giftplanning@drexel.edu.