According to a recent article entitled Most Investors Are Unaware of Benefits of Donating Stock found in the November 15, 2007 issue of The Chronicle of Philanthropy, a majority of people who own stock do not understand the tax breaks they could obtain by donating securities that have risen sharply in value. This information comes from a survey released by Fidelity Investments and the Fidelity Charitable Giving Fund.

More than 500 investors with at least $100,000 in stocks or mutual funds, including retirement accounts, and who also had donated $1,000 or more to charity in one of the past three years were surveyed. Sixty-eight percent of those surveyed were unaware of the tax benefits of giving appreciated stock versus selling it.

The main benefit of selling appreciated stock is that the donor has the opportunity to save 15 percent in capital-gains tax on the amount by which their stock appreciated. This savings is on top of the deduction they receive for the actual donation of stock or cash. 

A copy of the full report entitled “Smart Giving: Maximizing Your Charitable Dollars Through Donations of Appreciated Stocks and Mutual Funds,” is available free on Fidelity’s Web site at http://www.charitablegift.org.