Publicly traded securities and investment accounts

Donors can give appreciated securities such as:

  • Stocks

  • Bonds

  • Mutual funds

  • Exchange-traded funds (ETFs)

These gifts can be made during the donor’s lifetime or through estate planning.

During-Lifetime Gifts

Donors may transfer securities directly to the nonprofit organization.

When donors give appreciated securities they have held for more than one year:

  • They may avoid capital gains tax on the appreciation.

  • They may receive a charitable deduction equal to the fair market value.

After-Lifetime Gifts

Donors may designate a nonprofit as the Transfer-on-Death (TOD) beneficiary of a brokerage account. Upon their death, the account balance transfers directly to the organization.

Example

A donor transfers $100,000 of appreciated stock to a nonprofit during their lifetime. Later, they name the organization as the TOD beneficiary of their brokerage account. After their passing, the account balance of $150,000 is transferred to the nonprofit, creating a combined lifetime and legacy impact of $250,000.

Pro Tip

Encourage donors to transfer securities directly rather than selling them first. This typically maximizes the donor’s tax benefits.

Embolden