A charity (e.g. local church) that does not have its own brokerage account can still receive stock donations (in the form of cash) by using the stockdonator.com service.
Donating appreciated stocks (instead of selling and giving cash) has many advantages
- The receiving charitable organization gets it as cash (no difference for them)
- The donor can deduct 501c3 charitable deduction (this part is same as with cash), and, IN ADDITION, not pay any capital gains tax for appreciated stock
- The donor need not change their stock portfolio — they can buy the same amount of the same stock back on the same day, and it will not be considered a ‘wash sale’ — effectively, this is just like donating money.
Requirements (if using the stockdonator.com service)
- Charity should be registered with stockdonator.com (easy process)
- The donor should have a brokerage account with one of the following 8 : https://stockdonator.com/brokerages-supported/
- [optional, and important] If the donor's old appreciated stock is on a different brokerage, and that brokerage supports account partial transfer, they may transfer those stocks (in an amount equivalent to their planned giving) to their own accounts, on one of the 8 supported brokerages in step 2 above.
Example
- Say that you want to donate $1000
- You have $1000 of MSFT in your portfolio
- [optional] You buy $1000 of MSFT with cash on the day of your desired donation -- if you do not want to change your stock portfolio
- On the desired donation day, you send the old appreciated $1000 worth of MSFT stock (without selling it) to the charity (via stockdonator.com)
- That’s it — as before, you get to claim the $1000 of 501c3, and, IN ADDITION, you get to avoid paying capital gains tax on your MSFT, and, your portfolio (amount of MSFT shares you have) does not change (if you chose to do the optional step (3), of buying it back)!
Reference :
[1] https://www.freewill.com/donate-stocks?utm_source=cocatalyst
[2] https://www.freewill.com/learn/how-to-donate-stock-to-charity