When I donate stock why is it reporting the cost basis and not the market value?

If the property has increased in value...

Had the stock been sold in a short-term capital gain situation (held less than a year), then the value of the donation must be the fair market value adjusted by any appreciation in value.  This generally equals your cost basis in the property.  Since you are going straight from the sale to a donation, you do not pay taxes on this gain and therefore, you are essentially wiping out the gain.

In the event the stock would have been sold in a long-term capital gain situation (held a year or more), then the fair market value should be used.

In the event either of these are used in business or would be taxed as ordinary income (and the value has increased), then you must use cost basis instead of fair market value.

If the property has decreased in value...you must use the fair market value for the donation amount.

https://www.irs.gov/publications/p526/ar02.html#en_US_2015_publink1000229754