Charitable Giving and Equity Awards: How to Maximize Your Impact (and Tax Savings)
Giving to causes you care about is one of the most fulfilling things you can do with your money. But if you’re making charitable gifts using cash, you might be missing a big opportunity, especially if you receive equity as part of your compensation.
In fact, giving cash can be one of the least tax-efficient ways to donate.
Why Cash Might Not Be the Best Option
The problem with giving cash is twofold:
You may not receive a tax benefit.
In 2025, most taxpayers won’t itemize their deductions, which means many won’t get any tax break for charitable contributions. And thanks to the new One Big Beautiful Bill, there’s now a 0.5% AGI threshold before charitable gifts can even be deducted.Even if you do get a deduction, the benefit is limited.
At best, you’ll reduce your federal tax bill by your marginal rate, maybe 35%, which is better than nothing, but still leaves a lot on the table.
A More Efficient Option: Donating Appreciated Stock
Instead of giving cash, you can donate appreciated stock, like RSUs or shares acquired from exercised options. Doing so can provide two major tax benefits:
Avoid paying capital gains tax on the appreciation
Receive a charitable deduction for the full fair market value of the stock
Depending on your tax bracket and where you live, that can save you significantly more than a simple cash gift.
Example: Meet Will
Will is single, lives in Minnesota, and is a high earner with equity compensation. He wants to give $30,000 to charity.
If he gives cash, he may save about 44.85% (his combined federal and state marginal rate).
But if he donates stock with a $3,000 basis that’s now worth $30,000, he avoids $7,700+ in capital gains taxes and still gets a charitable deduction.
His total tax benefit? Over $21,100—a savings of more than 70%.
Using a Donor-Advised Fund (DAF)
Will wasn’t sure about donating $30,000 all at once. That’s where a Donor-Advised Fund comes in.
A DAF lets you donate appreciated stock now, take the full tax deduction this year, and then grant the funds to charities over time. It gives you flexibility, control, and maximized tax efficiency, all while supporting the causes you care about most.
Better Giving = Bigger Impact
If you’re already giving to charity, or thinking about starting, consider whether your current giving strategy is as efficient as it could be.
By donating appreciated equity and using tools like donor-advised funds, you can give more, support the causes you love, and reduce your tax bill, all at once.
Want help reviewing your charitable giving strategy? Let’s talk.