7 Ways Stock Donations Can Help Your Nonprofit

By October 21, 2020June 30th, 2021Organizations

Charitable organizations are the soul of our communities. They play an intricate role in our society’s social fabric. Therefore, nonprofits need to offer various ways for donors to contribute. Stocks and bonds can and should be part of those options. How can a nonprofit organization accept stock donations without the hassle of extensive paperwork and brokerage accounts?

It is easier than you might think. For more than nine years, we have been proud to offer this opportunity to charities across the nation. Helping NPOs accept stock donations quickly and seamlessly is at the heart of everything we do. This article will discuss the top seven ways we can help your organization. You will see why your supporters love donating stock to charity.

#1:  Stock Donations are Tax Efficient

Donating stock to charity offers tax benefits to your donors. When donors give appreciated stock, they take a tax deduction for the full market value. This often increases the contribution and deduction by more than 20%. Donors who give long-term stock to charity do not have to pay capital gains on those stock gifts. The fair market value they receive in the tax deduction is usually well above what they paid. In turn, the NPO can either keep the shares or liquidate them immediately for the fair market value at the time of transfer.

Donors can potentially lower future capital gains taxes by gifting their appreciated shares over a year old to charity. They can then buy new shares for the same stock at the higher price. Like one’s physical health, a stock portfolio can get “sick” with too many gains that put a donor at risk of higher taxes; therefore, this is a great incentive that will inspire supporters to donate more.

#2:  People Love Donating Stock to Charity

Aside from the significant tax benefits, people enjoy donating shares to charity because it does not cut into disposable income or cash assets. They end up giving more without feeling any “buyer’s remorse.” The decision to give back is easier when they are not dipping into cash, and when donating stocks is fast and straightforward.

#3: It’s a Quick and Seamless Fundraising Opportunity

Anyone who has run a nonprofit fundraising event knows about all the caveats that go with asking for cash donations. It’s not easy to get people to part with their hard-earned money, no matter how worthy the cause. The greatest challenge for charitable organizations to accept stock donations is the process is perceived as difficult. They may think a brokerage account is needed to get the contribution.

With Stock Donator, you don’t need a brokerage account, so accepting shares has never been more accessible. You can promote this option on your website, in e-mails, print mailers, social media, and any other channel that includes existing, new, and potential donors.

#4:  Accepting Stock Donations Makes You More Donor Centric

Donor centricity is at the heart of every nonprofit organization. It’s vital to know what your donors value in the organization. Those values are critical to building an affinity between the NPO and its benefactors. Donors aren’t merely a source of funds; they strengthen the organization’s connection to the cause. By offering a holistic, personalized experience that helps your bottom line and improves the donor’s experience, your organization will be more donor centric.

In today’s age, simple convenience will make all the difference in whether someone will donate to a charity. If they can only give cash, they are less likely to give a significant amount. Further, with incentives like the incredible tax benefits that come with donating stock, donors are more likely to keep giving to the organization, especially if the charity goes out of its way to make things easier for them.

#5:  Stock Donations Can Dramatically Increase Contributions

Cash only makes up about 10% of the world’s assets. Most wealth is tied up in non-cash holdings like stocks and bonds. For a charitable organization to grow, it requires adaptability and convenience. The more convenient it is for people to contribute, the more donations your organization will receive.  In a study out of Texas Tech University led by Dr. Russell James, J.D., Ph.D., CFP, it was found that the most successful charitable organizations promoted and received contributions from cash, non-cash, and securities assets.

Those who took securities assets were found to achieve 66% growth over five years. Nonprofits that received other kinds of non-cash assets achieved a 50% growth in that same period.  Organizations that received cash-only donations saw just 11% growth. That’s a 55% difference that shouldn’t be ignored, especially when we make it so easy to include stock donations in your fundraising efforts.

#6:  Stock Donations to Nonprofit Organizations Inspire More Charitable Giving

When asking a donor to gift cash instead of assets, you may find they are less likely to part with their money. Someone who makes $10,000 per month, for instance, would see a $5,000 donation as too large a contribution of their disposable income; however, when that $5,000 donation comes from non-cash assets like real estate, stocks, and mutual funds, the person will be more likely to give a higher contribution.

Most people want to give back to their communities through their favorite charities. They are always looking for ways to impact the world and make a difference. If there’s a way to give more without negatively affecting cash assets, it becomes a win-win for the donor and organization.

#7:  Accepting Stock Donations Can Enhance Brand Authority

When you open the door to accept stock donations and other non-cash assets, you are not only helping your organization grow and your community give back, but your nonprofit will become an authority in charitable giving. A stock donation to nonprofit organizations may sound complicated, but we make it one of the simplest and most powerful fundraising tools in your repository. When you can make something complicated simple for your donors, you will be a well-known and recognizable leader.

You do not need a brokerage account at Stock Donator to accept online donations. We do all the heavy lifting for you. Setting up a free account is simple, and we walk you through how to place promotions on your digital marketing assets. We’ve been doing this work and helping nonprofits meet their growth goals for more than nine years, and we can help you too. As leaders in our industry, we invite you to review our process and set up an account to get started right away.

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Fidelity Charitable: Donating Stock
Nolo: Donating Stock to Charity
Clarification: Does Your Nonprofit Promote Stock Gifts?
BlueNorth: Donor Centricity