At Schwab Charitable, which manages more than $2 billion in contributions, generous investors can choose a donor-advised fund as an alternative to private foundations, using as little as $5,000 in appreciated securities, Wright-Violich says.

In this way, she adds, a donor with annual income of $100,000 avoids capital-gains tax and receives a charitable deduction, reducing his or her taxable income to $95,000.

Schwab liquidates the donated securities and the proceeds belong to the donor-advised fund. The fund, in turn, invests them in one or more of a family of seven mutual funds, Wright-Violich explains.

The donor has the right to advise how the contribution is invested and how the proceeds are granted or donated at his or her death. The donor may also designate a family member or other individual to take over the donor advisory function.

Meanwhile, that $5,000 in the donor-advised fund continues to grow until the donor decides to grant it. The investment isn't passive. All or part of the assets can be moved into another fund, or be split among several funds. The donor can continue to add to the fund to achieve a goal, receiving a charitable deduction with each addition.

"Say you want to endow a chair at your alma mater," Wright-Violich says. "When the fund reaches the level where you can endow that chair, you make the grant."

Part of the popularity of donor-advised funds stems from current economic conditions, she says. As investors rebalance their portfolios, they may want to sell stocks that have appreciated dramatically. If they have enough cash at hand, they can use that to buy safer securities and donate the stock, enjoying the double tax break in the process.

Charity is an American tradition, particularly for the wealthy elite. More than 60 percent of Americans give to charity, according to the Bank of America Study of High Net Worth Philanthropy by The Center for Philanthropy at Indiana University. The percentage is even higher among the wealthiest segment of the population: almost 98 percent.

About one-third of charitable giving by high-net-worth donors is done with appreciated securities, Ramsay H. Slugg, senior vice president and wealth-strategies adviser for U.S. Trust, Bank of America Private Wealth Management, says.

There are limits. Donors may deduct no more than 30 percent of their adjusted gross income for contributions of appreciated assets in any given year, though any excess can be carried forward for up to the five ensuing years.

Typically, charitable annuities and trusts attract donors with sizable stock holdings that pay scant dividends—in a sense, asset rich and cash poor. With a charitable annuity or trust, the institution sells the stock and manages the funds, which provide a lifetime income stream.

Take, for example a Michigan State University alumnus with a large, appreciated holding in utilities. His $10,000 investment is worth $500,000 today, but his dividend is negligible. With a charitable trust, that $500,000 can generate income during his lifetime and provide a very handsome gift for Michigan State.