When you sell stock [1] you pay capital gains tax, but there's no tax if you donate the stock directly. Under a bunch of assumptions, someone donating $10k could likely increase their donations by ~$1k by donating stock. This applies to all 501(c) organizations, such as regular 501(c)3 non-profits, but also 501(c)4s such as advocacy groups.

In the US, when something becomes more valuable and you sell it you need to pay tax proportional to the gains. [2] This gets complicated based on how much other income you have (which determines your tax bracket for marginal income), how long you've held it (which determines whether this is long-term vs short-term capital gains), and where you live (many states and some municipalities add additional tax). Some example cases:

A single person in Boston with other income of $100k who had $10k in long-term capital gains would pay $2,000 (20%). This is 15% in federal tax and 5% in MA tax.
A couple in SF with other income of $200k who had $10k in long-term capital gains would pay $2,810 (28%). This is 15% in federal tax, 3.8% for the NIIT surcharge, and [...]

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First published:
December 30th, 2025

Source:
https://www.lesswrong.com/posts/2wn2k4gsCPjYQpTGZ/don-t-sell-stock-to-donate

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Narrated by TYPE III AUDIO.

“Don’t Sell Stock to Donate” by jefftk

LessWrong (30+ Karma)

“Don’t Sell Stock to Donate” by jefftk