Cash or Appreciated Stock? How to Structure Charitable Giving Intelligently
If you are writing a meaningful charitable check this year, the structure of that gift matters as much as the intent behind it.
Most families default to giving cash. It feels clean and simple. But if you are holding appreciated securities with significant embedded gain, that default can quietly increase your lifetime tax drag.
When you donate cash, you receive a deduction within the allowable percentage of your adjusted gross income. That’s straightforward.
When you donate appreciated securities instead, two things happen. First, you generally avoid recognizing the capital gain embedded in that asset. Second, you may still receive a deduction based on the value of the shares, subject to applicable limits.
The difference can be material.
If you are carrying concentrated positions with low cost basis, charitable giving can become a tool for reducing embedded gain exposure while funding causes that matter to you. That is not just philanthropy. It is capital allocation.
There are also boundary conditions.
Deduction limits matter. Income variability matters. If this is a lower-income year for you, the deduction may not be as usable. If this is a high-income year — a liquidity year, a bonus year, a sale year — the same gift may have far greater impact.
Execution discipline matters as well. Larger gifts require proper documentation. Certain non-cash contributions require formal valuation support. These are small details that can become expensive if overlooked.
For families thinking beyond a single year, charitable trust structures can allow income streams, multi-year impact, and estate coordination. That becomes less about a tax deduction and more about governance.
When you are giving at scale, we do not treat it as a year-end afterthought. We look at:
- Your income pattern
- Your embedded gains
- Your concentration exposure
- Your estate objectives
- Your liquidity needs
Philanthropy should align with portfolio strategy, not sit outside it.
Structure determines outcome.
Written by Christi Shell, CWS®, AAMS®, BFA™, CETF®, Managing Director and Private Wealth Strategist at Shell Capital Management, LLC.
To speak with Christi about your financial situation, request a private consultation.
Shell Capital Management, LLC is a registered investment adviser. This material is for informational and educational purposes only and does not constitute investment, legal, or tax advice. Advisory services are only offered to clients or prospective clients where Shell Capital Management, LLC is properly registered or exempt from registration. Any views are as of the date published and may change. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results.