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Gifts of publicly traded shares can be an important fundraising channel for nonprofits, particularly when donors hold investments they have owned for many years. But receiving stock requires a process for transferring securities, recording the gift, and acknowledging it accurately. This guide is written for nonprofit staff and board members exploring that process.
Why donors may give stock instead of cash
Some donors prefer transferring appreciated shares rather than selling them first. Depending on the donor’s circumstances, the recipient organization’s tax status, the type of asset, and applicable tax rules, an in-kind donation may offer tax advantages. Tax treatment is individual: donors should consult a qualified tax adviser before transferring securities.
Option 1: Receive shares through a brokerage account
An organization may be able to receive publicly traded securities through an account in its legal name. Coordinate with the receiving brokerage to obtain current transfer instructions, including any required DTC information, and establish a policy for whether shares will be sold promptly or retained. Never publish sensitive account details without appropriate controls.
Option 2: Use a donation-processing platform
Some fundraising platforms offer stock-giving workflows that reduce the amount of coordination required from staff. When comparing services, ask who receives the securities, when they are liquidated, how proceeds are delivered, what fees are deducted, and what donor information the charity receives.
Donorbox lists stock donations among the capabilities of its Pro offering. Confirm current availability, eligibility, fees, and processing partners directly before adopting the service.
Review Donorbox stock-donation capabilities
What should a nonprofit prepare?
- Written gift-acceptance and investment-liquidation policies approved by the appropriate leadership
- A designated staff contact for transfer instructions and donor questions
- Procedures to identify incoming gifts and match them to donors
- Accounting practices for valuation, settlement proceeds, and fees
- Appropriate donor acknowledgment and record retention
Receipts and tax documentation
Stock gifts can involve special valuation and substantiation rules. A nonprofit’s acknowledgment generally should describe the noncash property received without assigning the donor’s deductible value. Donors may have additional reporting obligations, such as IRS Form 8283, depending on the gift and applicable exceptions. A qualified tax professional should review unusual or large transfers.
How to explain stock giving on your website
Provide a short explanation of the process, a secure way to request transfer instructions, and contact information for assistance. Make clear that a donor should notify the organization when initiating a transfer so the gift can be identified. Avoid promising a particular tax result.
Bottom line
Stock giving is worth considering if your nonprofit has donors who hold investments. Start by choosing a receiving method, setting internal policies, and documenting how gifts will be tracked. A platform can simplify the workflow, but it does not replace financial oversight or tax advice.
