Donor-advised fund, funded with appreciated stock

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If you give to charity, giving appreciated investments instead of cash is one of the simplest tax wins there is. You deduct the full value of shares you've held over a year, and neither you nor the charity ever pays tax on the gain.

A donor-advised fund adds flexibility: you can give several years of donations at once to get a bigger deduction now, then send grants to the charities you choose over the following years.

How it works

Give appreciated investments instead of cash: you deduct their full value and never pay tax on the gain. A donor-advised fund lets you take several years’ deduction now (bunching) and send grants to charities over time.

What makes it hold up

Shares held more than a year
The fund’s receipt with the date and value
Your itemized deductions, to see if bunching beats the standard deduction

Risks

Low. Starting in 2026, the first 0.5% of income you give isn’t deductible when you itemize, and the top bracket’s benefit is capped at 35 cents per dollar, so bunching matters more. Gifts to a donor-advised fund don’t count toward the new $1,000 ($2,000 joint) deduction for people who don’t itemize.

Questions to ask your CPA

Which of my holdings have the biggest gains to give?
Should we bunch two or three years of giving this year?

Common questions

Why give stock instead of cash?

You avoid the capital gains tax you'd owe if you sold the shares, and still deduct their full market value. The charity receives the same amount either way.

What is bunching?

Giving two or three years of donations in one year so your itemized deductions beat the standard deduction, then taking the standard deduction in the years between.

What changed in 2026?

If you itemize, the first 0.5% of your income given to charity isn't deductible, and the top bracket's benefit is capped at 35 cents per dollar. That makes bunching larger gifts into fewer years more valuable.

Is there a limit?

Gifts of appreciated stock to a public charity or donor-advised fund are generally deductible up to 30% of your income in a year, with the rest carried forward for up to five years.

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Education, not advice. Tax law changes and every situation is different, so confirm the details with your CPA or tax advisor before acting. This page was last checked against tax law as of October 2026, including the 2025 tax law, in October 2026.