Why donate in stock?

There is a considerable tax advantage if you choose to donate in stocks versus credit card or bank transfer. 

Stock donations will bring you substantial tax benefits if you've held the stock for more than a year and plan to claim itemized deductions.

Imagine that last year you bought some Apple shares for $10,000 and that today they are worth twice as much, $20,000. If you donate the entire amount to a charity of your choosing, you can claim a charitable donation deduction of the current market value of the shares — the full $20,000!

Depending on your tax bracket, such a donation could generate anywhere from $3,000 to $7,400 in tax savings. The higher your tax bracket is, the larger your tax deduction will be. For those in the higher tax brackets, you can potentially cut your tax bill by $7,400 when you only paid $10,000 for the original shares. 

In addition, when you hold on a stock share for more than 12 months, you'll have to pay a tax on its appreciation amount. But if you donate the stocks instead of selling them, you won't have to pay any tax at all! This is why many investors prefer to donate highly appreciated stock in order to maximize their tax benefits — such a donation will result in a larger itemized deduction and no capital gains tax.

Giving stock is the only way to avoid capital gains tax

Ever wondered how you can avoid paying taxes when you decide to sell your stock options? Imagine a scenario in which you sell your long-term appreciated securities first and donate the proceeds to WaterAid. After selling the stock, you will have to pay a capital gains tax, which can be anywhere from 15% to 20% depending on your tax bracket.

As a result, you will end up paying a massive tax and making a donation that is 20% less than you would have made had you donated your investments directly.

The conclusion? Giving stock directly to WaterAid can help to reduce any capital gains tax and will mean more income to our clean water projects around the world. 

Calculate your tax savings

 

WaterAid by the numbers

We were founded because no non-profit like us existed

34 countries and counting

We work in Africa, Asia and Latin America

Clean water for27 million
people so far

Our impact

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No water on the front lines
43% of hospitals function without clean water. In the era of COVID-19, when water and soap are the best defense we have against the virus.

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