How to Accept Stock Donations

Educating donors on the benefits of stock gifts is financially optimal for you and your donors. Historically, to receive a single stock gift, nonprofits had to do a lot of work. Even the first step (opening an account with a brokerage firm) how to accept stock donations could take weeks to complete.

• Make sure that stock donors have a place near the top to adequately express your thanks.
• This fee is used to pay banks, processing companies and other administrative costs.
• With these tips in mind, your nonprofit will be on the path to leveraging stock donations in no time.
• Many nonprofits don’t invest in stock gifts because they don’t seem to come up very often.
• Under its “Ways to Give” page, the organization provides a detailed guide on the benefits of stock donations with a step-by-step walkthrough of the process.
• Plus, donating a stock that has increased in value during holding allows donors to avoid paying capital gains taxes.
• One of the largest youth-focused research hospitals in the nation, St. Jude receives support from a widespread supporter base.

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If you incur any brokerage fees connected to the sale, this amount is recorded as an investment fees expense. Set up a brokerage account with a low-fee provider such as Schwab or TD Ameritrade. Some brokers will give special deals, meaning low fees, to nonprofit organizations. You can also request a QuickBooks match for a monetary or stock donation you’ve already made. For example, the American Heart Association refuses donations of stock or other interests in companies relating to tobacco, nicotine delivery, or cannabis.

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With our Easy Button for Stock Gifting™ nonprofits can quickly grow stock donations with comprehensive support. Partnering with companies like Overflow can make these conversations easier. Also, they have a financial advising service that makes it even smoother for your donors’ financial advisors to ensure the stock gift is processed.

The modern way to accept stock gifts: 4 steps

• Nonprofits typically outline their generally accepted types of donations and liquidation procedures in their gift acceptance policies.
• Apple offers a slightly different type of corporate stock donation-matching program but will match certain gifts of securities nonetheless.
• Sometimes, the resulting tax deduction can even be more than what they originally paid!
• If your policy is to sell the shares upon arrival, it’s better to sell the shares the same day so you don’t have an accounting difference between the donated value, and the actual cash proceeds.

After receiving a stock donation, the final step is to send the donor a tax receipt that complies with IRS requirements. In 2019, Warren Buffett donated $3.6 billion of Berkshire Hathaway stock to five different charities, which brings his total stock gift donations to almost $35 billion. Donating securities is a popular and smart investment move for the wealthy, which means it would be a good idea to start considering this strategy for your benefit as a donor. It’s your choice which method you choose to accept stock donations, but as you now know, one option is a lot easier than the other. Those who have questions or want to learn more on can visit help sections, or get support in chatbot in the bottom right.

Donors that have stock with a fair market value of at least $500 are eligible to donate stock via Donorbox’s integration with The Giving Block. Any organization in the U.S. with a Donorbox Pro or Premium account can enable this integration on their donation form. Once enabled, a donor can give stock or crypto directly through your donation form on your website or your Donorbox-hosted donation page. Whether you’re seeking to accept stocks for the first time or revamp your existing approach, you’ll need to make the case to your organization that it warrants attention. Once users submit this form, they’ll receive custom instructions for initiating a gift with their broker and the organization’s DTC information. The organization receives all the data it needs Accounting for Churches to steward and account for the gift, and the entire process runs more smoothly on both sides.

How can I know if an individual’s stock donation qualifies for a match?

A study by Dr. Russell James of Texas Tech University found that just mentioning strategic tax deductions increased charitable giving by almost 20%. Because donors hold more wealth in stock than in cash, stock donations tend to be larger than cash donations. When a donor gives stock shares directly to a nonprofit, they avoid having to pay capital gains tax on those shares AND they can still deduct 100% of the value of their contribution. Thus, they can receive a tax write-off at the market value of the stock upon donation—regardless of what they bought the stock for.