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Donating appreciated stock is one of the easiest ways to give more to causes you care about. Maybe your stocks have appreciated greatly since you purchased them. Maybe a surge in value of one of your holdings has thrown your portfolio off balance. Maybe you just want to refocus on other investment categories.

If you also give to charity, these scenarios should encourage you to review your investment portfolio with a donation strategy in mind. Why? Because donating stock directly to charity is one of the most tax-smart ways to give. Yet, it is often not well understood or widely used. According to a 2016 study, 80 percent of donors own appreciated assets, such as stocks, mutual funds or bonds, but only 21 percent of those donors have contributed these types of assets to charity.

Here are four reasons you should give stock donation a try:

  1. You can give more – By donating stock that has appreciated for more than a year, you are giving 20 percent more than if you sold the stock and then made a cash donation. The reason is simple: avoiding capital gains taxes.
  2. You can potentially reduce future capital gains – Consider donating some of your appreciated shares and then buying new shares to reset your cost basis at the current, higher price.
  3. You can give your portfolio a health check – If a review of your investments’ gains and losses shows that it’s time to rebalance your portfolio to maximize its performance and optimize for risk, donating stock can give your portfolio the health check it needs.
  4. You can donate stocks without headaches – A donor-advised fund is a public charity and takes the hassle out of donating stock. A donor-advised fund is like a charitable investment account which can be used exclusively to support charities you care about. Instead of donating multiple blocks of stock to multiple charities, you make one donation which is used to fund your “charity account”.  You can then make donations over a period of years but get the benefit of the deduction when you initially fund the account.