Many families own shares that have grown over the years. Selling them can trigger a tax bill. Giving them away can avoid it. That is why more US donors now donate stock to charity instead of writing a check. The idea sounds complex, but the steps are short. A donor advised fund makes them even easier. Yaqeen Welfare Foundation explains how this works in its donor advised fund guide. This article shows how a stock gift works, what to watch for, and how Muslim donors can think about zakat and sadaqah.

Why Donate Stock Instead of Cash?

Think about shares you bought years ago at a low price. Today they are worth much more. If you sell them, you owe tax on the gain. You then give what is left to charity. The charity receives less, and you keep less.

A direct gift of shares changes the picture. You transfer the shares to the charity or to your donor advised fund. You generally do not pay capital gains tax on the gain. The charity receives the full market value.…