Investments & Stocks as Gifts: Your Biggest Opportunity for Year-End Giving

As you wap up your year-end fundraising appeals, don’t forget to remind your donors to consider gifts of stock for their year-end giving.

We find that many major donors (if not most major donors) are making gifts of appreciated stock.

While the US stock market has been down this year, do remember that the overall market has appreciated considerably in the past 5 years.

In general, your donors’ stock portfolios have appreciated considerably over these past five years or so. 

For example, we had a capital campaign donor recently who literally said that he was “feeling the wealth” and was ready to discuss his campaign gift immediately. Needless to say, our client was in front of him quickly and closed a nice campaign gift in the mid-six figures.

The time might be right for many donors to make gifts of stock.  Moreover, you may have donors who are sitting on investments that have grown significantly over the past few years. So you might say they have “paper profits” – profits that are quite sizable.

No hit to the donor’s personal cash flow.

It’s interesting to consider where gifts of stock come from. These gifts are made from funds that are set aside for investments or retirement.
As a result, when a donor gives stock, the money doesn’t typically come out of their bank account.

As a matter of fact, there’s usually no hit to their personal cash flow, because the gift is coming from investments that are put aside for those other purposes.

A donor who really believes in your mission, for example, can get credit for a significant annual gift, without the gift impacting her regular bank account.

Takeaway: Be alert for the potential for a gift of stock, because when donors make gifts from their assets rather than their living expenses, those gifts tend to be higher than cash gifts.

Amazing tax benefits to donors.

Giving stock is a no-brainer for donors who are smart about their finances.

In this case, the tax benefits are significant. To demonstrate, I’ll walk you through the process.

• When your donor sells stocks that have increased in value, they have a capital gains tax bill to pay on their profit.

However, if they make a gift of stock to your organization – they get not one but two significant tax benefits:

• They avoid paying capital gains taxes on any profit from the stock sale.
• They receive a generous charitable donation for the full value of their gift – profits and all.

These charitable deductions make tax planners happy. That deduction helps to shelter your donor’s current income, so its benefits keep on giving and giving.

Takeaway: When your donor gifts appreciated stock to your organization, they benefit from the tax advantages. And so does your organization, which, of course, receives a nice cash gift to support your work.

Make Gifts of Stock Easy for the Donor

Above all, make the stock gifting process seem easy for the donor. On your web donation page, you might simply say “Want to make a gift of stock? Call us today.”

Remember on the donation page, you want as few words as possible. Gifts of stock can take several steps, but do not outline all those steps on your donation page.

Just keep it simple, and give them the first important step to take: “Call our office at this number and let us know.”

Once you get the call from the donor, you can coordinate the process. You’ll connect your donor with your organization’s broker who can process the stock transfer, and handle the transaction from there.

Takeaway: Make sure the process of gifting stock is clear on your website.  

Don’t Overcomplicate Gifts of Stock

We do not recommend using more complex language like “appreciated securities.” Yes, this language is technically correct, however, it overly complicates the idea. Again, make gifting stock feel easy.

Do remember that good fundraising writing should be on the fifth-grade level. Just stick to a very simple idea, such as this phrase: “gifts of stock.” And say that over and over to your donors, just as a reminder.

Takeaway: Make sure the process of gifting stock “feels” like a simple process to your donor.   

Capital Campaign Gifts of Stock

If you are in a capital campaign, consider the donors you are nurturing for five, six, and even seven-figure major gifts. They all just might be feeling somewhat wealthy this year-end.

Don’t forget to remind them about the idea of donating investments & stocks as gifts. All you have to do is mention those very nice tax benefits, and you’ll get their brains working on this idea.

Wouldn’t it be great to close some of your pending major capital campaign gifts before year-end? Stock gifts can accomplish that.

Takeaway: Consider who your top prospects are for gifts of appreciated stock – and focus there.   

Leadership Annual Fund Gifts of Stock

You probably have loyal donors who are devoted to your mission and wish they could do more. In fact, they’d LOVE to do more if they only could. Many of these donors, too, have highly appreciated stock portfolios.

In all your annual fund materials, don’t forget to mention how easy it is to make a gift of stock.

Be sure to float the idea out early – because it could take a bit of time for the donor to coordinate the stock transfer to your organization’s broker.

Takeaway: Give your donors time to coordinate the stock transfer. 

Bottom Line: Encouraging gifts of stock can be your secret weapon to close out a successful year-end campaign.

As always, it is a pleasure to share our weekly insights with you as we cover important fundraising strategies. 

If your organization is planning a capital campaign or expanding your major gifts program – we can help. Send an email to coaching@gailperry.com if you’d like to schedule a free strategy call with us.