Giving with appreciated stock: DAFs, foundations, and trusts

Written by The Dynasty Team | Sep 26, 2026, 3:28:28 PM

For many people, one of the first questions after a liquidity event isn't about returns. It's about what they want the money to do, and often that includes giving a meaningful amount away. How you give can change how much reaches the causes you care about.

Give shares before you sell

If you sell stock and donate the cash, you pay capital gains tax first and donate what's left. If you donate appreciated shares directly to a qualified public charity or a donor-advised fund, you generally avoid capital gains tax on the appreciation and can typically deduct the shares' full fair market value.

Two conditions matter:

The full fair market value deduction generally applies to shares held for more than one year. For shares held a year or less, the deduction is generally limited to what you paid for them. Shares from recently vested RSUs or recently exercised options may not have been held long enough yet.
Deductions for gifts of appreciated stock to public charities are generally limited to 30% of your adjusted gross income in a year, with unused amounts carried forward for up to five years.

The takeaway: if giving is part of your plan, the order matters. Donate the shares first, then sell what you're keeping.

Comparing the main options

	Donor-advised fund	Private foundation	Charitable trusts (CRT, CLT)
What it is	An account at a sponsoring public charity	A separate legal entity you control	A trust that combines giving with an income stream or a later gift
Tax deduction	Immediate, when you contribute	Available, with lower limits than public charities	Depends on the structure
Control	You recommend grants over time	Full control, including staff and programs	Set by the trust's terms
Administration	Low	Significant, with required annual distributions and public filings	Moderate to high, with legal setup
Privacy	Anonymous giving is often possible	Grants are publicly disclosed	Varies
Often used for	The simplest way to start	Large, hands-on, long-term giving	Larger gifts combined with income or estate planning

Giving with evidence in mind

Some people want to be rigorous about impact, comparing causes by their scale, how solvable they are, and how neglected they are. That approach is often associated with effective altruism. Organizations such as GiveWell publish research on specific high-impact charities. Whatever framework you use, a donor-advised fund can give you time to decide where to give without losing the tax benefit of giving shares now.

Start with what you want the money to do

Before vehicles and tax rules, it helps to ask a simple question: what would you like this money to do? The answer shapes everything else, from how much you give to how you structure it.

Check before a large gift. Deduction rules depend on your income, the type of shares, how long you've held them, and where they go. A tax professional can confirm the details before you give.

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