STOP WRITING CHECKS TO CHARITY!

Let’s be honest.

Very few people are sitting at their kitchen table writing checks anymore. Most charitable giving today comes straight out of a checking account automatic draft, online donations, recurring monthly gifts. It’s easy, it feels good, and it supports causes we care deeply about.

But just because something is easy doesn’t mean it’s the most efficient way to give.

If you have appreciated investments especially employer stock, you may be unintentionally making generosity harder on yourself than it needs to be.

Why how you give matters

Most people focus on how much they give to charity. That’s important. But how the gift is funded can make a meaningful difference in both taxes and day-to-day cash flow.

When gifts come from income, that money is first earned, taxed, and then donated. For many families, that approach quietly puts pressure on monthly cash flow especially in years when giving is consistent and meaningful.

There may be a more thoughtful way to structure those gifts.

Appreciated stock: an overlooked opportunity

Appreciated stock is simply an investment that is worth more today than when it was acquired. For many people we work with, that includes Walmart stock, particularly shares that vested through Restricted Stock Units over time.

Walmart stock has increased significantly over the past year, and we often see families holding shares with sizable built-in gains. At the same time, charitable donations continue to come directly out of checking accounts.

That mismatch is where opportunity often lives.

A real-world example

We recently met with a client who was donating $12,000 per year to their church and another $4,000 to other local non-profits. The money was coming straight from their checking account each month.

Meanwhile, they held Walmart stock that had vested in 2024 and appreciated meaningfully. Selling those shares would have created a large capital gain. And like many people, they mentioned something that felt familiar:

“We’re starting to feel a little tight on cash at the end of the month.”

By stepping back and looking at the full picture, we identified another way to fund their generosity.

Instead of donating cash, the client donated appreciated Walmart stock directly. The result?

· The church received the full value of the gift

· The client avoided creating additional capital gains

· Monthly cash flow improved by roughly $1,300 per month

Same generosity. Better structure.

Why donating appreciated stock can be so effective

When long-term appreciated stock is donated directly to a qualified charity:

· The charity can typically sell the stock without paying taxes

· The donor may receive a charitable deduction for the full market value, depending on personal circumstances

· The donor avoids realizing capital gains that would have occurred if the stock were sold first

In simple terms, this approach can allow people to give more efficiently while preserving flexibility in their own finances.

Looking for simplicity? Consider a Donor-Advised Fund

For some families, donating directly to multiple charities using stock can feel complicated. That’s where a Donor-Advised Fund can be helpful.

A Donor-Advised Fund allows you to:

· Donate appreciated stock in one transaction

· Receive the charitable deduction in the year of the contribution

· “Bundle” or front-load giving in higher-income years

· Distribute grants to charities over time at your own pace

It can be a clean, simple way to align tax planning with long-term charitable intent.

An important warning before you move forward

This strategy is not right for everyone.

If you donate stock that has only been held for a short period of time generally less than one year the tax deduction may be limited to what you originally paid for the stock, not its current value.

That’s why it matters where the stock came from, when it vested, and how long it has been held. Shares from long-held Restricted Stock Units often work well. Other situations may not.

Details matter here, and assumptions can be costly.

This isn’t about giving less

To be clear, this is not about telling people to stop giving to charity. It is also not about giving more but instead maximizing the amount that you are already donating.

It’s about being intentional.

For many families, donating appreciated investments instead of income can:

· Support causes they care deeply about

· Reduce unnecessary tax friction

· Create breathing room in monthly cash flow

Final thought

If you are charitably inclined and hold appreciated stock funding gifts from your checking account may not be your most thoughtful option.

We are not telling you to stop giving. We are encouraging you to give in a more tax-efficient manner.

Before making any changes, review your situation with a financial advisor and tax professional. If you have questions about whether donating appreciated stock or using a Donor-Advised Fund could fit into your charitable plan, please reach out to our team. We are always happy to help.