Donating Stock to Charity: The Tax-Smart Way to Give
You bought the shares sometime in the nineties or the early 2000s, tucked them into a brokerage account and mostly forgot about them. Now they are worth far more than you paid, and you would like to use some of that value to help your parish or a Catholic school here in Orange County. Your first instinct is probably to sell some shares, write a check with what is left and move on. There is a better way, and almost no one tells you about it.
What Most People Are Never Told
If you have owned stock for more than a year and it has grown in value, you do not have to sell it to give from it. You can transfer the shares themselves directly to The Orange Catholic Foundation (OCF). When you do, two things happen at once. Your parish, school or ministry receives the full value of the stock, not a reduced amount left over after taxes. Plus, you generally do not owe capital gains tax on the growth in those shares at all.
Selling first and giving the proceeds is the more expensive path for almost every family in this situation. It is also the default path, simply because nobody explained the alternative. Once you understand how a direct stock gift works, going back to the sell-first approach rarely makes sense.
How a Stock Gift Actually Works
The mechanism is more straightforward than most people expect, and your broker has likely handled it before, even if you have not.
- You contact your brokerage and request a stock transfer, or you ask OCF for its account transfer instructions to give to your broker.
- Shares move directly from your account to an account held by The Orange Catholic Foundation. You never take possession of the cash, and you never trigger a sale on your own return.
- OCF sells the shares after receiving them and directs the proceeds to the parish, school or fund you designated.
- You receive a written acknowledgment from OCF stating the number of shares and the date received, which your accountant will use for your return.
Here is a hypothetical example to make the numbers concrete. Say you hold stock worth $100,000 that you originally purchased for $20,000. If you give the shares directly, you avoid capital gains tax on the $80,000 of appreciation, and your charitable deduction is generally based on the full $100,000 fair market value of the shares, since they have been held longer than one year. If you sold that stock first, you would owe capital gains tax on the $80,000 gain before you ever wrote a check. Your specific result depends on your cost basis, your holding period and your income. Review the details with your accountant before you transfer anything.
The holding period matters. Stock held for more than one year qualifies for this treatment. Stock held for a year or less is treated differently, and the deduction is generally limited to your cost basis rather than the current value. If you are not certain how long you have held a position, your broker's statements will show the purchase date.
For gifts of publicly traded stock, no outside appraisal is required. The value is simply what the shares were trading at on the date OCF received them. That is one reason a stock gift is often the simplest non-cash gift to make.
"This Sounds Like a Lot of Paperwork"
It is a fair worry, and it is usually the first thing people say once they understand the tax mechanics. In practice, a stock gift typically involves one phone call to your broker and one form, and the transfer itself is often complete within a few business days once it is initiated. OCF provides the receiving account details and a simple letter of instruction you can hand to your broker directly. You are not filling out a stack of forms. You are giving your broker one set of numbers.
The part that does take a document is the tax return. Non-cash gifts over $500 require you to file Form 8283 with your return, and OCF's acknowledgment letter gives your accountant what they need to complete it. IRS Publication 526 covers the substantiation rules for non-cash gifts in more detail if your accountant wants the full text. We work alongside your CPA, attorney and financial advisor on this. We do not replace them and bringing them into the conversation early makes the process smoother for everyone.
What a Gift Like This Actually Pays For
Year-end giving through appreciated stock continues to gain momentum, with December marking the busiest season. For example, when comparing December 2024 to December 2025, OCF saw the number of donors making stock gifts rise from 16 to 27. Many of those donors were families embracing this charitable giving strategy for the first time to support a Catholic cause close to their heart.
What it funds is specific, not abstract. A gift directed to Catholic education helps a family afford tuition at a parish school they could not otherwise choose. A gift directed to parish ministries helps cover the ordinary costs of running a parish, from utilities to the religious education program, that never show up in a Sunday collection basket. A gift directed to priest retirement helps care for a man who spent forty years serving a community like yours. Ways to Give lays out the full range of funds and ministries you can direct a gift toward. You choose where it goes. The mechanism is the same either way.
If stock is only one of several appreciated assets you are weighing, including a property or a retirement account, how charitable giving can lower your capital gains tax walks through the broader mechanics across asset types.
If you have a spouse, a sibling or a friend from the parish who has mentioned the same stock sitting untouched in an account for years, this is a conversation worth having with them directly. Most people learn about this option from a person they trust, not from an institution.
Your Next Step
If you are holding appreciated stock and thinking about a gift before year end, the right time to start is now, since transfers can take longer during the December rush. Schedule a meeting with The Orange Catholic Foundation to walk through your specific shares and timeline or call 714-282-3021 to start the conversation.
Disclaimer
This information is intended to be general in nature and is not offering professional tax, legal or accounting advice. Please discuss your philanthropic giving with your accountant or other professional advisors. The Orange Catholic Foundation is a 501(c)(3) charitable corporation, Tax ID 33-0934571.
Frequently Asked Questions
If I give stock I have held for many years, do I still owe capital gains tax?
Generally, no. When long-term appreciated stock, meaning stock held more than one year, is transferred directly to a qualified charity like OCF, the donor does not recognize the capital gain and the deduction is typically based on the full fair market value of the shares. Your specific result depends on your basis, your holding period and your income, so confirm the details with your accountant before the transfer.
Do I need an appraisal to donate publicly traded stock?
No. Publicly traded securities are valued using the trading price on the date OCF receives them, so a qualified appraisal is not required for this type of gift. An appraisal is generally required for other non-cash assets, such as real estate or closely held business interests, above certain dollar thresholds.
How much of my gift can I deduct in one year?
Gifts of long-term appreciated stock to a public charity are generally deductible up to 30 percent of your adjusted gross income for the year, with any excess carried forward for up to five years. Your accountant can confirm how this limit interacts with your other deductions.
How long does it take to transfer stock to OCF?
A stock transfer typically takes a few business days once your broker has OCF's account instructions, though timing can vary by custodian, especially in late December. If you are considering a gift before year end, starting the conversation in September or October gives your broker time to complete the transfer well before the deadline.
