Few American investors know about the benefits of donating appreciated securities to charity, according to a study by Fidelity Investments.

Instead of writing a check to their favorite charity, savvy donors can donate their taxable investments in securities that have gone up in value and avoid having to pay capital-gains taxes on price appreciation.

"In short, millions could save billions or give billions more," said Steve Feinschreiber, senior vice president of research for Fidelity.

An example written by The Virginian-Pilot & The Ledger-Star states that a generous investor can donate the securities of a stock or fund that they bought for $5,000, but has increased in value to $10,000. The investor can give the $10,000 to the charity and avoid paying taxes on the gains. The charity can sell the securities at their current value without paying the tax either.

If the investor chooses, they can use their $10,000 tax credit to buy the very same securities they donated.

Millions of Americans don't donate appreciated securities because they think the process is too complicated or  they don't realize they can.

In a survey of 508 households with at least $100,000 in investable assets who made charitable donations of $1,000 or more at least once the past three years, Fidelity found that fewer than a third recognized the benefit of donating appreciated securities and only 5% said they had donated appreciated securities to charities over the past three years.

Thirty nine percent of people polled said they didn't want to get rid of investments that were performing well and 23% said they thought donating appreciated securities was too much work.

Many firms have established separate donor-advised funds that accept appreciated securities with simplified paperwork and have comparatively modest minimum initial contributions, including Fidelity, Vanguard, T. Rowe Price and Charles Schwab.

A single contribution to a donor-advised fund can be divided among multiple charities over multiple years.

"It's a real advantage when the decision to donate is independent of the decision about which charities to support," said Ann Boyce, president of the T. Rowe Price Program for Charitable Giving.

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