When you go into this math, it is easiest to assume the donor has a donation amount in mind ($1000 will be donated in 2016) for example. This helps compare apples to apples. I can't honestly imagine a donor donating only $100 if they had stocks but $1000 if the money was in the bank for example. When I donate to charity, I know how much money I want to donate and then look at what stock has gained the most (percentage wise) and donate enough shares of that stock to meet my dollar goal. Then I rebuy the same stock that day with cash so my portfolio balance isn't out-of-whack. Saves me a ton of money on taxes, I donate the same amount as I would otherwise, and my investments have a net zero change (other than the $100 basis becomes a $1000 basis in this example).
Also, at least in the cases that I've donated stocks, they have been sold in the donation process. For example, Vanguard has lengthy set of forms to accept donated stocks, the charity must meet Vanguard's minimum investments, the charity might have investments at another investment firm, the stock might not fit the charity's vision (like steak-house restaurant stock being donated to PETA), the stock might not fit the charity's portfolio needs, etc. They can go through all of those hassles, or check the "sell the stock and give the cash to the charity" box. I assume most charities take the cash-out option. Then they can use or invest it as they need.
I'm not opposed to an option C. But I do think that $900 should be taxed in some way, shape, or form.