Donating stock to nonprofits has become an increasingly popular way to give. Why?
Savvy donors appreciate the option of being able to donate with stock because it offers them additional tax benefits. Savvy nonprofits understand the value of non-cash assets as well as the opportunities that arise when they offer as many ways as possible for donors to contribute.
Accepting stock transfers also can boost overall fundraising growth. Donations of stock can also lead to fundraising growth. According to a Texas Tech University study, nonprofits experience fundraising growth that is substantially higher, up to 55%, when they accept non-cash gifts such as stock, rather than solely accepting cash.
Even during market downturns, nonprofits should actively promote stock gifts. Adding how to donate stock to nonprofits into each year-end giving plan can greatly help each donor fully maximize tax benefits while considerably increasing all contributions to the cause.
Why Donors Love Stock Donations
If you’re not promoting stock gifts, here are 3 important reasons why you should.
- Stock Donations Offer Major Tax Benefits
When donors give appreciated stock, they can avoid paying capital gains tax (which can range from 18.8% to 40%).Example: If a donor purchased stock for $500 and it is now worth $2,500, they avoid paying $500 in capital gains tax if they donate the stock instead of selling it. - Stock Gifts Tend to Be Larger Than Cash Donations
Stock donations often exceed the amount donors would typically give in cash. Plus, donors can deduct the full market value of the stock on their taxes.Example: A donor giving $2,500 worth of stock can deduct the full amount, potentially saving $750 in taxes if they are in the 30% tax bracket. - Stock Is Where Most Wealth Lives
Cash accounts for only 10% of the world’s assets. The majority of wealth is held in stocks, IRAs, real estate, and other non-cash assets. Accepting stock gifts makes it easier for donors to contribute without affecting their liquid cash.
How to Promote Stock Donations to Your Donors
Year-end is an especially good time to remind donors that gifts of stock are accepted. Here are a few ways to get the word out:
- Include a Stock Giving Insert in Direct Mail
Your year-end mailings should feature a specific callout. This callout needs to point out all stock gifts. Donors should give the brokerage firm’s full details, right account number, official tax ID and a certain contact person for questions to make things easy. - Share a Donor Story in Your Newsletter or Email Campaigns
Storytelling is a strong tool. Spotlight one giver so others feel motivated to do the same; that giver’s stock gift has a large effect. - Use a P.S. in Thank-You Letters
Donors may not read every piece of mail, but they do read thank-you notes. Add a P.S. message reminding them that your nonprofit accepts stock gifts, DAF contributions, and IRA rollovers. - Feature Stock Giving on Your Website’s Homepage
As donors plan their year-end giving, they’ll look for ways to maximize their impact. Add a prominent “Other Ways to Give” section on your homepage that includes stock donations, DAFs, and other non-cash giving options. Ensure all links work and that donation instructions are clear and up-to-date.
Make It Easy for Donors to Give Stock
It’s never too late to promote stock donations. Many donors don’t realize that donating appreciated stock is one of the most tax-efficient ways to support their favorite causes. By educating your supporters on how to donate stock to nonprofits, you provide them with a smarter giving option while strengthening your organization’s fundraising efforts.
Want to learn more? Contact us today to see how your nonprofit can benefit from stock gifts and other non-cash contributions!
