While cash remains the most common way parents support TCPG, donating stock may be preferable due to possible tax advantages:
Bypassing Capital Gains: If a parent sells appreciated stock to give cash to the school, they owe up to 15% to 20% federal capital gains tax on the growth (plus potential state taxes and a 3.8% surtax for high earners). Donating the stock directly eliminates this tax entirely. This depends on how long they have held the stock (short-term or long-term capital gains).
Full Fair Market Value Deduction: The donor can typically write off the full, current fair market value of the stock on their taxes (up to 30% of their Adjusted Gross Income).
Suppose you donate stock worth $1,000 that originally cost you $300.
ILLUSTRATIVE DONATION:
Stock held more than one year
Current stock value: $1,000
Unrealized gain: $700
You generally avoid realizing the $700 capital gain.
The $1,000 fair market value can form the basis of your charitable deduction, subject to applicable limits.
If your employer provides a 1:1 match, the nonprofit could receive another $1,000.
This example assumes you've held the stock for more than one year.
Stock held one year or less
Current stock value: $1,000
Unrealized gain: $700
You still avoid realizing the $700 gain, which would otherwise be taxed at ordinary income rates.
Your charitable deduction is generally limited to what you paid for the stock, here $300, not the $1,000 market value.
If your employer provides a 1:1 match, the nonprofit could still receive another $1,000, depending on your employer’s policy.
If you hold appreciated stock you’ve owned for less than a year, waiting until it passes the one-year mark before donating may give you a larger deduction.
Shares from vested RSUs
Suppose your RSUs vested when the shares were worth $700, and those same shares are now worth $1,000.
Value at vesting (your cost basis): $700
Current stock value: $1,000
Unrealized gain: $300
You already paid income tax on the $700 when the shares vested.
Donating the shares lets you avoid tax on the $300 of growth since vesting.
If you’ve held the shares more than one year since they vested, the $1,000 fair market value can form the basis of your charitable deduction, subject to applicable limits. If it’s been one year or less, the deduction is generally limited to $700.
If your employer provides a 1:1 match, the nonprofit could receive another $1,000. Many companies with RSU programs also run matching gift programs, so check your employer’s policy.
The longest-held vested shares in your brokerage account usually have the most growth and the full one-year holding period, making them the best to donate.
Yes. Many employers with matching gift programs will match stock donations, usually based on the stock’s fair market value on the day it’s transferred. However, policies vary, so it’s worth checking a few things before you donate:
Whether stock gifts qualify. Some programs match only cash or credit card donations.
Whether the PTA is eligible. Some programs exclude K-12 schools or parent organizations, or require the nonprofit to be registered on the company’s giving platform first.
Annual limits. Most programs cap how much they’ll match per employee each year.
How to submit. Matches usually aren’t automatic. You’ll typically need to request the match through your company’s giving portal after donating, often by a set deadline.