News & Events

Image March 2024 Nonprofit News: Simplify Stock Giving and DAFs for Organized Giving

Invigorate 2024 fundraising with donors’ gifts of stock

Most of your donors have been made aware, often repeatedly, that giving highly-appreciated stock to favorite charities is a very tax-effective strategy. Indeed, gifts of shares held for more than a year are typically deductible by the donor at fair market value. When the charity sells the shares, the charity receives 100 cents on the dollar because nonprofit organizations don’t pay income tax. The net-net here is that the donor (1) benefits from a favorable income tax deduction, (2) avoids the capital gains tax that would have been triggered if the donor had sold the shares and used the cash proceeds to make the gift to charity, and (3) maximizes value for the charity. 

So, with all of these benefits, why do so many donors forget about giving stock when they’re ready to make a gift to your organization? Sometimes a donor is in a hurry, doesn’t think it through, and writes a check  or makes a credit card gift online before realizing that it would have been better to give stock. Sometimes a donor assumes it will be too much of a hassle to pursue a stock gift. Most of the time, though, a donor simply forgets.

This is why it is so important for your organization to mention the benefits of giving stock in nearly every fundraising communication. At any point in time, during any year and any month, regardless of whether the stock market as a whole is up or down, at least a few of your donors will be sitting on highly-appreciated stock. Those are the donors who need to hear the message. Already in 2024, for example, several stocks are hitting milestone one-year performance marks. Assure your donors that giving stock is very easy. Seamless processing for stock gifts is one of the many benefits of establishing your organization’s agency fund with the community foundation. 

As always, please reach out to the community foundation for ideas and strategies related to gifts of stock and other noncash assets. We’d love to help you seize the opportunity! 

How donor-advised funds help charities stay afloat

You’re no doubt familiar with donor-advised funds, especially if some of your donors use their donor-advised funds at the community foundation to support your organization. What you might not know is that the national average annual “pay-out rate” for all donor-advised funds is 18% and at ACF it is 22%. Furthermore, donor-advised funds help many individuals and families get involved in organized giving at a low barrier to entry. Indeed, nearly half of all donor-advised funds carry balances less than $50,000. To dive deeper into these and other insights, we suggest taking a look at the Donor Advised Fund Research Collaborative’s recently-released study.

At the community foundation, we are committed to growing philanthropy, connecting donors to the causes they care about, and leading on critical community issues. An important part of our mission is offering donors a wide range of ways to give to your organization and other charities that are most important to them. In many cases, establishing a donor-advised fund, field-of-interest fund, designated fund, or other type of fund at the community foundation helps a donor unlock assets for charitable purposes that would otherwise be difficult to tap. This is especially the case with highly-appreciated, noncash assets such as closely-held stock and real estate. We also make it easy for donors to structure long-term giving plans and bequests so that they can maximize their support for you and other favorite nonprofit organizations and involve their families, too.

Please reach out anytime if you’d like to learn more about the community foundation’s mission to grow philanthropy for our entire region. 

This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.