---
title: How to donate stock from your direct index
description: Learn how to donate stock to a DAF from your direct index or self-managed holdings, what happens after you submit, and how many donations you can make.
---
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3. [Stock donations](https://help.frec.com/en-us/transfers-deposits?hsLang=en-us#stock-donations)
November 12, 2026
# How to donate stock from your direct index
Choose a dollar amount to donate, then deposit the same amount in cash. Frec selects eligible shares with a total market value as close as possible to your amount, favoring shares with the largest gains. Frec then invests your cash back into your index to help keep it on track.
You can donate from Frec’s Classic direct indexing, Long short, and Diversify portfolios.
### Steps
1. From your Frec dashboard, select Transfer, then Donate.
2. Open a DAF through Daffy or link an existing one. See [Linking or creating a DAF](https://help.frec.com/en-us/choosing-and-linking-a-daf?hsLang=en-us).
3. Choose an amount. We show you the most you can donate from eligible shares. See [How is the available to donate amount determined](https://help.frec.com/en-us/checking-which-shares-you-can-donate?hsLang=en-us).
4. Add the same amount in cash by bank transfer, wire, cash already on Frec or your portfolio line of credit.
5. Review the estimate. You'll see the estimated shares, their value and the capital gains you won’t pay tax on. If those shares back your portfolio line of credit, we'll flag any margin call risk.
6. Submit your donation.
### What happens after you submit
| **Stage** | **What happens** |
| --- | --- |
| You submit your donation | Your dollar amount is locked in. |
| Your cash arrives on Frec | Frec selects the final shares at current prices, choosing your most appreciated lots held more than a year. |
| Shares are donated to DAF | The donation goes to your DAF, and your cash is invested back into your index. |
| Your DAF receives the donation | Your donation is complete, and your DAF sponsor provides the tax documentation. |
### How this keeps your index on track
Removing shares from a direct index changes its holdings and can cause it to drift from its benchmark. Investing your cash back into your index helps keep it invested and closely aligned with its benchmark. The new shares are bought at current prices and replace shares with large gains, which could create more tax loss harvesting opportunities in the future. See Why do I have to deposit cash for direct index donations?
### Keep in mind
- **Shares are donated once your cash arrives.** A bank transfer can take several business days, so plan ahead for year-end gifts.
- **The final shares can differ from the estimate.** Prices can move between when you submit and when your cash arrives, so Frec selects the final shares at current prices. Your dollar amount doesn't change.
- **One donation at a time.** You can start a new donation once the current one is complete. See [How many donations can I make.](https://help.frec.com/en-us/how-to-donate-stock-from-your-direct-index?hsLang=en-us)
- **Using your portfolio line of credit adds to your loan balance**. Read [Donating shares that back your portfolio line of credit](https://help.frec.com/en-us/what-if-the-shares-i-donate-are-backing-my-portfolio-line-of-credit?hsLang=en-us) before you choose this option.
### How to donate stock from your self-managed holdings?
You can donate stocks or ETFs from your self-managed holdings to a donor-advised fund (DAF) and choose the exact lots you want to give.
### Steps
1. From Overview, go to Transfer \> Donate.
2. Open a DAF with Daffy or link your existing DAF. [See Linking or creating a DAF](https://help.frec.com/en-us/choosing-and-linking-a-daf?hsLang=en-us).
3. Select the eligible lots you want to donate.
4. Review and submit your donation.
### Which lots are eligible
| **If the lot…** | **What happens** |
| --- | --- |
| Has been held more than a year and has grown in value | It’s shown and eligible to donate. You can generally deduct its full market value. |
| Has been held a year or less | It isn’t shown. Short-term lots are generally deductible only at what you paid or their market value, whichever is lower, so most of the benefit is lost. |
| Is worth less than you paid | If you donate it, you can’t claim the loss, and your deduction is limited to its current market value. If you sell it instead, you can realize the loss and use it to offset gains. You could then donate the cash from the sale, or donate other appreciated shares. |
### Choosing which lots to give
If you’ve held the shares for more than one year, your deduction is generally based on their market value, not what you paid for them. And because the shares are donated rather than sold, their growth isn’t subject to capital gains tax. That means lots with the largest gains offer the greatest potential tax benefit. If you hold the same stock in several lots, the ones with the lowest cost basis have the largest gains.
### Keep in mind
- Donations are made in whole shares.
- Donating can reduce concentration. Giving away part of a large position trims it without selling a share.
- Shares that back your portfolio line of credit reduce your borrowing power when they leave your account. Read [Donating shares that back your portfolio line of credit](https://help.frec.com/en-us/what-if-the-shares-i-donate-are-backing-my-portfolio-line-of-credit?hsLang=en-us) first.
### How to donate stock from your self-managed holdings?
You can donate stocks or ETFs from your self-managed holdings to a donor-advised fund (DAF) and choose the exact lots you want to give.
#### **Steps**
1. From Overview, go to Transfer \> Donate.
2. Open a DAF with Daffy or link your existing DAF. See [Linking or creating a DAF](https://help.frec.com/en-us/choosing-and-linking-a-daf?hsLang=en-us).
3. Select the eligible lots you want to donate.
4. Review and submit your donation.
#### Which lots are eligible
| **If the lot…** | **What happens** |
| --- | --- |
| Has been held more than a year and has grown in value | It’s shown and eligible to donate. You can generally deduct its full market value. |
| Has been held a year or less | It isn’t shown. Short-term lots are generally deductible only at what you paid or their market value, whichever is lower, so most of the benefit is lost. |
| Is worth less than you paid | If you donate it, you can’t claim the loss, and your deduction is limited to its current market value. If you sell it instead, you can realize the loss and use it to offset gains. You could then donate the cash from the sale, or donate other appreciated shares. |
#### Choosing which lots to give
If you’ve held the shares for more than one year, your deduction is generally based on their market value, not what you paid for them. And because the shares are donated rather than sold, their growth isn’t subject to capital gains tax. That means lots with the largest gains offer the greatest potential tax benefit. If you hold the same stock in several lots, the ones with the lowest cost basis have the largest gains.
#### Keep in mind
- Donations are made in whole shares.
- Donating can reduce concentration. Giving away part of a large position trims it without selling a share.
- Shares that back your portfolio line of credit reduce your borrowing power when they leave your account. Read [Donating shares that back your portfolio line of credit](https://help.frec.com/en-us/what-if-the-shares-i-donate-are-backing-my-portfolio-line-of-credit?hsLang=en-us) first.
### How many donations can I make?
You can make as many donations as you like, one at a time. Once a donation is complete, you can start the next one.
### A donation from start to finish
1. You submit your donation. Your dollar amount (direct index) or selected lots (self-managed) are locked in.
2. Your cash arrives (direct index only). Frec selects the final shares at current prices.
3. Your shares transfer. The shares leave your Frec account and are sent to your DAF. For direct index donations, your cash is invested back into your index.
4. Your DAF receives the shares. This date determines which tax year your donation counts toward.
5. Your donation is complete. Your DAF provider sends your tax receipt, and you can start a new donation.
### Planning more than one gift
- Giving from several places? Make one donation from your direct index, then another from your self-managed holdings once the first is complete.
- Giving at year-end? Leave enough time for each donation to finish before December 31. See [Meeting the year-end deadline for DAF donations](https://help.frec.com/en-us/when-is-the-year-end-deadline-for-daf-donations?hsLang=en-us).
- Giving the same amount every year? Consider bunching several years into one larger donation. Read [The investor’s guide to donor-advised funds](https://frec.com/resources/blog/the-investors-guide-to-donor-advised-funds).
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