Your Guide to Making Noncash Charitable Contributions

For many high-net-worth individuals, charitable giving is a lot more than just writing checks at the end of the year. While cash donations are a valuable source of funding for many nonprofits, noncash assets can often provide greater benefit, more tax efficiency, and higher charitable impact in communities you support. 

From appreciated securities to real estate and business interests, noncash charitable contributions open the door to countless opportunities for donors who want to maximize both their generosity and their financial benefits.

At Greater Houston Community Foundation, we understand that getting started with noncash contributions requires expertise, planning, and a partner who can guide you through the intricacies along the way.

Continue reading about making noncash charitable contributions, or get in touch with us directly to get started. Our team works alongside donors and their professional advisors to help make sure every gift—regardless of how complex—achieves maximum impact and efficiency.

Key Insights

• Donating appreciated assets like stocks or real estate allows you to claim a deduction for the full fair market value while avoiding capital gains taxes on the appreciation, potentially saving thousands compared to selling the asset first and donating cash.
• IRS Form 8283 must be filed for noncash donations exceeding $500, and gifts over $5,000 generally require an independent qualified appraisal to substantiate your charitable deduction.
• Deduction limits for noncash contributions range from 20% to 30% of your adjusted gross income depending on the asset type and recipient organization, with unused deductions carrying forward for up to five additional years.
• Publicly traded securities are the simplest noncash gift option, while real estate, privately held business interests, and personal property require more complex documentation and due diligence processes.
• Greater Houston Community Foundation helps donors by coordinating appraisals, handling IRS compliance, and structuring contributions into donor advised funds for maximum tax efficiency and charitable impact.

Table of Contents

• What are noncash charitable contributions?
• Advantages of donating noncash assets
• Common types of noncash assets
• IRS rules for noncash contributions and documentation requirements
• How we help simplify complex gifts
• Strategic considerations for donors
• Unlock the potential of your assets with the Community Foundation

What are noncash charitable contributions?

Noncash charitable contributions involve donating property or assets other than cash to qualified tax-exempt organizations. These contributions can include a wide range of assets, from publicly traded stocks and bonds to real estate, privately held business interests, tangible personal property like artwork or jewelry, and even retirement account assets.

There are several reasons a donor might choose to make a noncash gift instead of donating cash. Contributing appreciated assets can help you avoid the capital gains taxes you would owe if you sold the asset and donated the proceeds. Noncash gifts can also allow you to make larger contributions without reducing your cash reserves. In addition, these types of gifts can be strategically incorporated into your broader financial and estate plans, giving you greater control, alignment, and flexibility in shaping your financial legacy.

The IRS recognizes noncash charitable contributions and has established a handful of requirements to encourage proper documentation and valuation. It’s important that you understand these requirements before you start contributing if you want to maximize your tax benefits and maintain full compliance with federal regulations.

Advantages of donating noncash assets

Donating noncash assets is extremely popular because of the many benefits and strategies it can make possible. While the benefits of donating your noncash assets will be specific to your financial plan and estate, some of the common advantages include:

What is an example of a noncash contribution? Common types of noncash assets

The noncash assets that will work best for you will depend on the current assets and opportunities within your existing portfolio, but some popular noncash assets that often prove advantageous for donation include:

Publicly traded securities

Publicly traded securities are the simplest and most common form of noncash charitable contributions. Stocks, bonds, mutual funds, and exchange-traded funds (ETFs) that have appreciated in value are ideal candidates for charitable giving. 

The transfer process is straightforward, and qualified charities can typically liquidate these assets quickly. When you’ve held these securities for more than one year, you can deduct their full fair market value on the date of the gift while avoiding capital gains taxes.

Real estate

Real estate offers significant opportunities for charitable giving, particularly when the property has appreciated substantially since purchase. Whether residential, commercial, a ranch, farmland, or undeveloped land, real estate donations can provide considerable tax benefits.

The IRS does, however, require professional appraisals for real estate valued over $5,000, and the property should generally be free of debt to maximize tax advantages. The Community Foundation works with donors to assess whether real estate gifts are appropriate, and handles the due diligence process, including environmental reviews and title searches.

Business interests

Privately held business interests can be valuable charitable assets for entrepreneurs and business owners. Closely held stock, partnership interests, and membership interests in limited liability companies all qualify as noncash contributions. Gifting business interests often involves professional appraisals and consideration of transfer restrictions outlined in governing documents. The Community Foundation’s experience with complex business interest donations can help you ensure proper valuation and compliance while maximizing your charitable deduction.

Personal property

Personal property like artwork, collectibles, and jewelry can be donated to charity, though specific rules apply. For a donation to receive a fair market value deduction, the property must be for “related use,” meaning the asset supports the charitable organization’s mission. 

For example, donating a painting to an art museum would qualify for a fair market value deduction, while donating the same painting to a food bank would limit your deduction to your original cost basis. These distinctions make it essential to work with knowledgeable advisors who understand the nuances of personal property donations.

Retirement assets

Donating retirement assets can give you unique opportunities for tax-efficient charitable giving. You can name a charity as the beneficiary of your IRA, 401(k), or other retirement accounts, allowing the charity to receive the full value tax-free upon your death. For donors over age 70½, qualified charitable distributions (QCDs) allow you to transfer up to $105,000 annually directly from your IRA to charity, satisfying your required minimum distribution without increasing your taxable income.

IRS rules for noncash contributions and documentation requirements

For noncash donations exceeding $500, donors must complete IRS Form 8283 and attach it to their tax return. This form requires detailed information about the donated property, including its description, date acquired, cost basis, and fair market value. 

When the total value of noncash donations exceeds $5,000 (except for publicly traded securities), the IRS generally requires an independent qualified appraisal to substantiate the deduction. This appraisal must be completed by a qualified appraiser who meets IRS standards and must be attached to your tax return.

While the $5,000 dollar mark is a major delineation, specific documentation requirements escalate based on the total value of your noncash contributions:

• Under $250: While no formal acknowledgment from the charity is required, maintaining records of the donation (receipts or bank statements) is strongly recommended for your records.
• $250 to $500: You must obtain a written acknowledgment from the charity that includes the organization’s name, the date of the contribution, and a description of the property donated. The acknowledgment should also state whether any goods or services were provided in exchange.
• $500 to $5,000: In addition to the written acknowledgment, you must complete Section A of IRS Form 8283, providing details about how and when you acquired the property, your cost basis, and the fair market value.
• Over $5,000: You must complete Section B of Form 8283 and obtain a qualified appraisal from an independent appraiser. The appraiser must also sign the form, and the appraisal itself must be retained with your tax records.
• Over $500,000: For noncash contributions exceeding this threshold, you must actually attach the qualified appraisal to your tax return when filed.

Noncash charitable contributions limits

Deduction limits depend on both the type of property donated and your adjusted gross income (AGI). You need to know the charitable deduction limit that applies to your specific situation before you can plan the timing and structure of your gifts for maximum tax benefits. The following table shows the general framework:

Any deductions exceeding annual limits can typically be carried forward for up to five additional tax years, allowing you to realize the full tax benefit of substantial gifts over time.

How to value non-cash donations for the IRS

Determining the value of donated property often hinges on the concept of “fair market value,” an essential concept in making noncash donations. The IRS defines fair market value as “the price a willing buyer would pay a willing seller when neither is under compulsion to buy or sell and both have reasonable knowledge of relevant facts.”

The method for determining fair market value varies depending on the type of asset being donated. For publicly traded securities, fair market value is straightforward—it’s determined by calculating the mean between the high and low trading prices on the date of the gift. If the securities are traded on an exchange, this information is readily available and easily documented.

For other types of assets, professional appraisers will need to get involved to determine fair market value. It’s important to note that your personal attachment to an item or what you originally paid for it does not determine its fair market value for tax purposes. The valuation must reflect what an independent buyer would reasonably pay in the current market.

How we help simplify complex gifts

Greater Houston Community Foundation serves as your strategic partner in navigating the complexities of noncash charitable contributions. Our expertise turns what could be an intimidating process into a straightforward and rewarding experience.

1. Expert guidance on noncash gifts. Our team has extensive experience assessing a wide range of noncash assets to determine whether they’re appropriate charitable gifts and help you get a fair evaluation. 
2. Structuring contributions into donor advised funds. One of the most powerful strategies for noncash giving involves contributing assets to a donor advised fund (DAF) at the Community Foundation. When you contribute appreciated securities, real estate, or business interests to your DAF, you receive an immediate tax deduction for the fair market value, avoid capital gains taxes, and create a permanent charitable fund that can support multiple causes according to your philanthropic priorities.
3. Assistance with due diligence, compliance, and maximizing donor intent. We handle the technical aspects of noncash contributions, including coordinating with your professional advisors, managing appraisal requirements, completing necessary IRS forms, and ensuring all documentation meets federal standards. 
4. Making noncash giving simple and impactful. Despite the inherent complexity of noncash assets, the Community Foundation’s experienced team makes the process straightforward. We’ve developed streamlined procedures for accepting and liquidating various asset types, and we communicate clearly throughout every step. 

Strategic considerations for donors

Consider the following to maximize the impact and efficiency of your noncash charitable contributions:

Timing your gift for maximum benefit 

Many donors accelerate noncash gifts into years when they expect higher income, which allows them to take larger deductions and offset that income. Year-end giving is particularly popular, though advance planning is essential since transferring noncash assets may take significant  time.

Combining noncash gifts with other charitable strategies

Using other gifting strategies can amplify your overall impact—and the benefits you reap from it. You might, for example, combine a substantial noncash gift to establish a donor advised fund with ongoing cash contributions that you recommend as grants throughout the year. You might also donate appreciated securities to fund a charitable remainder trust, providing income to you or your beneficiaries while ultimately supporting charitable causes.

Integration with broader estate and legacy planning

Estate planning charitable donations can reduce estate taxes while supporting causes you care about, and estate planning for generational wealth becomes more effective when charitable giving is thoughtfully incorporated. By working with both your financial advisors and the Community Foundation, you can create a legacy plan that addresses family wealth preservation, tax efficiency, and philanthropic legacy simultaneously.

Unlock the full potential of noncash charitable contributions with the Community Foundation

Noncash contributions are powerful tools for achieving your philanthropic goals, but they require expertise, planning, and a partner who understands both the technical requirements and the deeply personal nature of charitable giving. 

Because of the complexity of IRS regulations and valuation requirements, even experienced donors benefit from partnering with specialists who work through these transactions regularly. Greater Houston Community Foundation brings decades of experience helping donors transform appreciated assets into lasting charitable impact. 

We work seamlessly with your existing professional advisors—including financial planners, attorneys, and accountants—to help make sure your charitable giving complements your overall financial strategy.

Ready to explore how the Community Foundation can help you unlock the full potential of your charitable assets? Call us at 713-333-2210 or reach out directly to get started.

More Helpful Articles by Greater Houston Community Foundation: 

• Year-End Giving Deadlines: Your 2025 Tax-Planning Checklist
• Incorporating Charitable Giving into Your Investment Strategy
• How To Make a Bequest to a Donor Advised Fund
• What Is a Bequest?
• Donor Advised Funds Tax Benefits

This website is a public resource of general information that is intended, but not promised or guaranteed, to be correct, complete and up to date. The materials on this website, including all comments and responses to comments, do not constitute legal, tax, or other professional advice, and is not intended to create, and receipt or viewing does not constitute, nor should it be considered an invitation for, an attorney-client relationship. The reader should not rely on information provided herein and should always seek the advice of competent legal counsel and/or a tax professional in the reader’s state or jurisdiction. The owner of this website does not intend links on the website to be referrals or endorsements of the linked entities.