Dr. Russell James J.D., Ph.D., CFP®, professor in the Department of Personal Financial Planning at Texas Tech University completed a study reporting on data from 1 million NPO tax returns from 2010 – 2017. This included IRS-released data from e-filed returns of more than 200,000 nonprofit organizations. His study compared non profits that accepted stock donations to those that did not. He compared stock donation gifts to gifts of cash to see whether nonprofit organizations that accept stock donations do any better in fundraising than nonprofits that do not accept stock donations. Some charities accepted stock donations online while others use the traditional method using DTC transfers to accept stock donations. In either case, the study showed that those non profits that accepted stock donations online did better than those that only accepted cash.
The study noted a 55% difference in growth between accepting just cash and accepting securities.
Per the research, People are more likely to spend irregular, unearned gains (e.g., capital gains on appreciated assets) on luxury goods (O’Curry 1999) and philanthropy in particular (Reinstein & Reiner, 2012; Konow, 2010) than they are regular, earned income. Framing a donation as an exceptional event removes it from comparison with regular disposable income budget items and increases giving (Sussman, Sharma & Alter, 2015). What that means is that by asking for stock donations and letting donors know you accept stock donations, you can increase revenue. Donors are more likely to part with non-cash items like stocks, cars, and valuable assets than they are to part with cash. If you are not soliciting stock donations online, you are losing a valuable resource.
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