If you’re like most fundraising professionals, you’re ignoring one high-potential giving option. Sadly, it could be costing your nonprofit organization a fortune.
I’m talking about gifts of appreciated securities (e.g., stocks).
Just days ago, the Dow broke through the 20,000 level to set a new record close. The NASDAQ and the S&P 500 are also in record territory. As stock values have continued their post-election rally, many more Americans now hold appreciated stocks.
In 2016, 52 percent of Americans said they owned stocks in some form, according to Gallup. While that’s down from the 65 percent who owned stocks prior to the Great Recession, a majority of Americans still hold stock, directly, in mutual funds, and in retirement accounts.
Given that most Americans own stock and many of those stocks have appreciated in value, the nonprofit sector has a tremendous opportunity.
Contributing appreciated stocks provides donors with some important benefits:
- It gives donors access to a pool of money with which to donate that would not otherwise be available to them for other purposes without negative tax consequences.
- Contributors who donate appreciated stocks may be able to avoid paying the capital gains tax on those securities.
- Donors may also be able to take a charitable-gift tax deduction based on the value of the stock donated.
Given the benefits for the donor and the nonprofit organization, I’m puzzled about why more charities aren’t stepping up to promote gifts of appreciated securities.
I know. I know. You’re organization’s website probably mentions this giving option in passing. For example, my alma mater Temple University promotes gifts of appreciated stock and mutual funds on its website. Unfortunately, it takes three clicks from the Home Page to find the 82-word statement buried on the vaguely named page “More Ways to Give.” I suppose that’s a bit better than the charities that don’t mention this giving option at all.
On the other hand, the American Civil Liberties Union does a better job of promoting stock gifts on its website. Furthermore, unlike Temple University, the ACLU site provides all of the information and instructions a donor will need in order to make a gift of stock.
To help donors understand the value of donating stock, The National Philanthropic Trust, which manages Donor Advised Funds, includes a hypothetical case study on its website to illustrate the value of donating appreciated stock.
Savvy donors, perhaps more donors than in recent years, are already benefitting by donating appreciated stocks.
For example, NPT saw an increase of stock gifts last year. Eileen Heisman, NPT’s President and CEO, reports: