By Kyle Brown, COO at DonateStock – a fundraising platform that makes stock gifting to nonprofits easy and accessible.
Giving Season is upon us and the clock is ticking. As leadership and development teams lean in for a final push, donors are receiving countless requests for limited financial support.
DonateStock has ignited a conversation in philanthropy with its innovative approach to stock gifting. By reducing the friction for donors and nonprofits, stock gifting is now accessible and easy for everyone – and now donors can donate stock to their favorite cause in just a few clicks.
Why Stock Gifting?
Households own $40 trillion in stock. The stock market has created immense wealth for millions of households. Appreciated stock represents the most tax-advantaged way to support causes donors love for 4 key reasons:
- Donors can avoid capital gains tax on stocks held more than 1 year
- Donors can deduct the fair-market value of the gifted stock on tax returns
- Nonprofits receive larger pre-tax gifts (vs. after-tax cash gifts)
- Stock gifting is free for donors on DonateStock and offers nonprofits a new way to unlock stock gifting for their organization.
Why Now Is a Good Time to Donate Stock
More than 50% of US households own stock, with US households over the age of 45 allocating 88% of their assets in investments vs. 12% in cash, according to the 2019 US census. With so much demand on cash, it’s time to offer donors a fresh opportunity at meeting their philanthropic goals by allowing them to donate from their larger holdings of non-cash assets.
Research shows that stock gifting also has a significant impact on nonprofits’ growth and sustainability. Nonprofits that solicit stock gifts grew 5 times faster than those that did not.
How to Sign Up to Accept Stock Donations
Even though stock gifting has been around for decades, it has just now become accessible and easy for all through the online solution, DonateStock.
Nonprofits can place their “Donate Stock” Easy Button in their Donation form(s) and on their “Ways to Give” page. For example, here’s how World Central Kitchen makes it easy for donors to make a stock gift:
If your nonprofit does not have a stock gifting button, simply visit DonateStock and search for your nonprofit. If your organization is a 501c3 in good standing, your page already exists and you can claim it by registering at no cost in a matter of minutes:
The Stock Gifting Donation Process
With Donate Stock, donors can donate stock in just a few clicks; here’s how it works:
Step #1: Review the Donation Process Overview
The donor reviews the steps in the donation process and what happens once the gift is initiated.
Step #2: Enter Brokerage Information
New donors enter select brokerage account information in a secure form. They will never be asked for a login username or password, only their brokerage account information. Once entered, it will be saved for future donations.
Step #3: Enter Donation Details
Now the fun stuff! The donor enters the ticker symbol(s) and the number of shares they wish to donate, along with the accounting method – FIFO (first in, first out) is the most common. The platform then calculates the value of the gift based on the current market price.
Step #4: Review & Confirm Stock Donation
The donor is asked to review and then confirm their stock gift by providing a digital signature using a trackpad or mouse. After accepting the terms and conditions, the donor clicks “Submit” to finalize their stock donation.
Step #5: Stock Donation Confirmation
Once the donation has been submitted, the order is sent by DonateStock to the donor’s brokerage for execution. Both the donor and nonprofit dashboards are then updated and DonateStock sends each an email to confirm the transaction is in process.
The Donate Stock Nonprofit Dashboard
It often takes 2-5 business days for the stock to be transferred and received, depending on the time of year. Nonprofits can access their dashboard through their DonateStock account and view donation details:
A $100 Billion Opportunity
Appreciated stock represents $100 billion in potential funding. By making stock gifting accessible and easy for all, stock is poised to become a major source of funding for nonprofits of all sizes.
To learn more about stock gifting and other resources available for nonprofits and donors, check out the DonateStock blog, download the Ultimate Stock Gifting Guide for Nonprofits, and watch the DonateStock Donor Experience for Nonprofits video.