It’s coming up on the end of the year giving season, and you are planning to donate $1000 to your favorite charity. You could just give it via cash / check /credit card like most people do, and they will happily take it. And of course you can then deduct $1000 from your taxable income for the year which will save you $373. But there is a better way if you have appreciated stock.
Rather than me walking through the math here (and risk getting it wrong), I’ll just link to this donation tax calculator that will show you the difference. For a $500 investment that appreciated to $1000, by donating the stock rather than cash, you reduce your taxes by an extra $96 and the charity receives an additional $75.*
One of the charities I donate to and occasionally help with consulting recently sent out an email to donors that simply included a paragraph describing this. They immediately received 2 stock gifts along with several other commitments to donate stock at the end of the year.
Donors already want to help you, and if you give them a way to have it be a win-win for both of you, it will result in more donations. So I recommend making this a regular message in your donor communications.
* For simplicity, I assume that the yearly income is in the 28% federal, 9.3% California state and 15% capital gains tax brackets.