Most People Give From Income. What If There’s Another Way?

When people think about charitable giving, they usually think about writing a check.

 

It's familiar. It's simple. And for many donors, it's how giving has always worked.

 

But there's an interesting reality behind charitable giving in America: Most charitable gifts are made with cash, yet most wealth isn't held in cash.

 

Many individuals and families hold a significant portion of their wealth in assets such as:

• Stocks and mutual funds
• Real estate
• Business interests
• Cryptocurrency
• Other appreciated investments

 

Yet these assets rarely become part of the giving conversation.

 

Giving From Income vs. Giving From Assets

 

Most people give from income.

 

A donation is made from a checking account, savings account, or credit card.

 

While there's nothing wrong with that approach, it may not always be the most effective way to give.

 

In some cases, donating appreciated assets instead of cash can allow donors to support the causes they care about while potentially receiving additional tax benefits.

 

The result can be a larger impact for the charity and a more efficient giving strategy for the donor.

 

The Hidden Cost of Giving Cash

 

Consider a donor who purchased stock years ago for $2,000 and now owns shares worth $10,000.

 

One option is to sell the stock, pay capital gains taxes on the appreciation, and donate the remaining proceeds.

 

Another option may be to donate the appreciated shares directly to a donor-advised fund or qualified charity.

 

In many cases, donating appreciated assets can help a donor avoid capital gains taxes on the appreciation while potentially receiving a charitable deduction for the asset's fair market value, subject to applicable tax rules and limitations.

 

The donor could then choose to use other funds to repurchase the same investment position. In this example, they may have contributed $10,000 worth of stock that originally cost $2,000, while also potentially receiving a charitable deduction based on the stock's current value. Depending on the donor's tax situation, that deduction may help offset the cost of rebuilding the position.

 

While every situation is different and donors should consult their tax and financial advisors, many people are surprised to learn that the asset used to fund a gift can matter just as much as the gift itself.

 

That's why some of the most strategic charitable gifts don't come from a checking account.

 

They come from appreciated assets.

 

Why Many Donors Never Consider It

 

The challenge isn't a lack of generosity.

 

Most donors simply aren't aware of the options available to them.

 

Just as people seek advice when making investment or retirement decisions, charitable giving can also benefit from thoughtful planning.

 

When donors understand the different ways they can give, they are often able to align their philanthropy more closely with both their values and their financial goals.

 

A More Intentional Approach to Giving

 

Charitable giving doesn't have to be separate from financial planning.

 

In many cases, the most impactful giving strategies are developed alongside conversations about taxes, investments, legacy planning, and long-term goals.

 

The question isn't simply how much you want to give.

 

It's also how you choose to give.

 

Because sometimes the most powerful charitable gift isn't funded by income.

 

It's funded by an asset you've already spent years building.