A donation of securities or mutual fund shares is the most efficient way to give charitable gifts to your favourite charity. The elimination of capital gains tax may create a considerable tax advantage to you (the donor).
If you make a gift of appreciated stock, you will receive the benefit of a tax receipt for the fair market value of the stock, and not be subject to pay the capital gains tax.
Here an simple example:
If you were to donate stock that was originally purchased for $500 and now has a fair market value of $1,000, you now have a capital gain. You decide you wish to donate SAH Foundation for $1,000 and you will not have to pay any tax on the gain. However, if you were to sell the stock and then donate the money later, you would be required to pay tax on the capital gains at 50%.
It is important to seek the advice of your financial advisor when making a donation of securities.