Best strategies for donating stocks to charity for tax benefits?

This sounds great in theory but I've had trouble with smaller charities not knowing how to handle stock transfers. Do you just stick with bigger organizations? Or is there a way to donate stocks to smaller local charities that might not have a brokerage account?

For smaller charities, you have a couple of good options. Many community foundations offer donor-advised funds where you can donate your stocks to the foundation (getting your tax deduction immediately), and then recommend grants to smaller charities from there. This simplifies the process since the community foundation already knows how to accept stock gifts. Another option is to check if the smaller charity works with a service like DonateStock which specifically helps smaller organizations accept stock donations more easily. Some charities also work with sponsoring organizations who can accept securities on their behalf. Just call the charity and ask if they have a relationship with any organization that can help process stock gifts.

How does it connect with the actual charities though? That was always my sticking point - getting the charity to properly acknowledge receipt of the stocks and provide the right documentation for tax purposes.

Does this work with smaller brokerage accounts? I use a local credit union's investment service, not one of the big names. Also wondering if it handles cryptocurrency donations since I've got some ETH I'm thinking about donating.

It handles the charity connection by generating the proper transfer instructions and documentation that the charity needs. Once you select your charity, it creates the right forms and even sends them notification of the incoming donation with all the details they need to properly acknowledge it. I donated to three different charities last year and each one received perfect documentation. For smaller brokerages, it works with practically any brokerage that allows third-party transfers. I don't use one of the major brokerages either, and it integrated just fine with mine. And yes, they do handle crypto donations! They added that feature last year - I haven't used it personally but a friend donated some Bitcoin through it and said it was straightforward.

Wait, I'm confused. Isn't Claimyr for getting through to the IRS? How does it help with charities? Do charities even have call centers like that?

Sounds like an ad to me. I seriously doubt this is necessary - every charity I've ever worked with is EAGER to take your money and usually responds to donation inquiries super fast. Why would you need a special service to reach them?

Claimyr works with many government agencies and large organizations, not just the IRS. While it's most known for IRS calls, it works with any phone system that has long wait times. Many larger national charities (especially around year-end) have overwhelmed donation departments with long wait times. You'd be surprised! While many small charities are responsive, the larger national ones can be incredibly difficult to reach during peak giving season (November-December). I tried for nearly a week to reach the planned giving department at a major charity. They were getting thousands of year-end donation calls, and their stock donation specialist was impossible to reach. This isn't about organizations not wanting donations - it's about them being understaffed during their busiest season.

Do you need a minimum amount to open a DAF? I always thought those were just for rich people donating tens of thousands of dollars.

The minimums are actually pretty reasonable now! Fidelity and Schwab both allow you to open a donor-advised fund with just $5,000 initial contribution. Vanguard's minimum is higher at $25,000. Once established, you can make additional contributions of as little as $500. These definitely aren't just for wealthy people anymore. I'm solidly middle class and find it incredibly useful, especially for simplifying stock donations. It's also nice because you can contribute when it makes tax sense for you, but take your time deciding which charities to support. I make one stock transfer per year to my DAF (getting tax benefits immediately) but then make grants to 10-15 different organizations throughout the year.

I've used Benevity through my employer and it's super convenient. The big advantage is that my company matches the donation, which they won't do if I donate outside their system. The downside is they limit which stocks you can donate - they wouldn't let me donate some of my smaller cap stocks. Also, just be aware the processing time was longer than expected - about 2 weeks from when I initiated it to when the charity received it.

Thanks for sharing your experience! I hadn't considered the matching aspect - that's definitely a huge advantage if they'll match stock donations. I'll check if there are any stock restrictions in our version of the platform. The two-week processing time is good to know. I'll make sure to plan ahead, especially for year-end donations. Seems worth the extra wait to get the company match though!