Let’s begin with a statistic: Nonprofits receiving stock donations (in addition to cash) can increase their fundraising contributions by 55% over those only accepting cash donations.

‍Accepting stock donations can incentivize giving because of potential tax benefits. When selling stocks, individuals usually have to pay 37% tax on the appreciated value of their shares. But if they donate those stocks directly to a nonprofit, they can receive a double benefit, as donors are often exempt from paying capital gains tax on the appreciation, and can still receive a charitable tax deduction.

Many nonprofits have yet to enter the discussion around stock donations. That’s why this guide covers:

• 2 Easy Steps to Accept Stock Donations for Your Nonprofit
• 3 Reasons Why Nonprofits Should Accept Stock Donations
• Stock Donation FAQs

2 Easy Steps to Accept Stock Donations for Your Nonprofit

Historically, to receive a single stock gift, nonprofits had to do extensive work. To process stock donations, a nonprofit would often have to work with each donor individually to send the donation form, track and record the gift, send an acknowledgment letter, ensure paperwork was correct, liquidate and reinvest funds, and avoid forgery and fraud, all by hand! Even the first step (opening an account with a brokerage firm) could take weeks.

As a result, accepting stock donations was a time- and resource-consumptive task for nonprofits and donors alike, eluding all but the largest nonprofits. 

Today, however, modern technology offers a streamlined alternative.

Before we dive in, let’s break down some common myths about accepting stock donations.

Stock Donations: Myths vs. Reality

Click a card to reveal the reality

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At Infinite Giving, our goal is to democratize the ability for nonprofits to easily receive stock, crypto, and donor-advised fund donations. We want to help even the playing field for high-capacity giving. For this reason, we’ve simplified the process of accepting stocks to just two easy, user-friendly steps. Let’s take a look!

Step 1: Set Up a Nonprofit Brokerage Account

When accepting stock donations as a nonprofit, the first step is to have a place for those funds to go. This requires a brokerage account and finding the right partner to host it. Infinite Giving is one of the only technology platforms that includes opening and hosting a brokerage account for nonprofits. It's also the only brokerage account holder that has the technology to simplify this process for your donors to gift stock.

To create a brokerage account with Infinite Giving, you’ll provide your nonprofit’s contact information, copies of your 501(c)(3) IRS Determination Letter and Articles of Incorporation, and your tax identification number. You will also be asked to provide a secondary signer and acknowledge board approval. It may sound like a lot, but the application is fully digital and really quick to complete.

For most nonprofits, your brokerage account can be opened on the same day with Infinite Giving.

With this information, we’ll quickly verify your 501(c)(3) status and activate your account. Unlike investing with a big bank or an active wealth advisor, for most nonprofits, your account can be ready to receive and liquidate stock donations within 2 to 3 business days (see Infinite Giving’s onboarding guide for documentation needed on this process).

Unlike other stock and crypto donation providers, which may take a high percentage of every donation that flows through your account, there are no hidden fees and no transaction costs on stock donations through Infinite Giving.

Step 2: Share Your Nonprofit’s Stock Donation Link With Donors

With your Infinite Giving account open, you now have one fully customizable Donation Page that you can embed on your website as well as a unique giving link to quickly share en masse with your donors about your new giving opportunities!

Then, share your ability to easily accept stock donations in your fundraising outreach. Make sure you remind them about the tax savings available to them when giving stock gifts! 

Consider including a link with easy-to-follow stock donation instructions in the following places: 

• Website. When donors visit your nonprofit's donation page on your website, make stock, crypto, DAF, and endowment giving donations a clear, easy option.
• Email. Plan an email campaign announcing that your nonprofit can accept stock donations. 
• Social media. Share your link on your social media accounts and explain the potential donor benefits of stock donations, such as avoiding capital gains tax, decreasing taxable income, and receiving a larger tax deduction.

By using a donation link, you not only make it easier to accept stock donations and for donors to give them, but you also keep your nonprofit’s tax information safe, mitigating the potential for fraud and related risks.

Watch this walk-through to see how to gift stocks to nonprofits with Infinite Giving.

What Comes Next

Once you’ve taken the above steps, your job is done. For a look behind the curtain, here’s what happens next.

Donors Donate Stock to Your Nonprofit

With our platform, we reduce the friction for donors and organizations when accepting donations. Rather than having donors fill out a hard-copy form and mail (or fax!) it back to your nonprofit, or call your office, or have their guy call your guy, your donors will now fill out a quick stock donation form online that automatically initiates the stock transfer process.

At Infinite Giving, this simple form consists of the following seven fields:

• Nonprofit recipient
• Donor’s name
• Donor’s email address
• Donor’s brokerage firm
• Stock identifier
• Quantity of shares
• Donation date

There are no logins or passwords required, and we take zero transaction fees on stock gifts, so the full gift goes to your organization. Once a donor fills this out, they’ll click submit, and in a matter of days, the donated stock will be liquidated and deposited as cash into your bank account or can be invested through Infinite Giving. On your end, you don’t even have to click a button.

Automatically Liquidate Stock Donations

Perhaps the easiest (and most exciting) part of the process, in this step, you don’t need to lift a finger. Following your account settings and preferences, donated stocks can be automatically liquidated and deposited into your linked bank account.

We take care of the immediate liquidation of the gift and deposit it directly into your linked bank account while providing real-time donor transparency and all donation receipts.

Send the Donor a Tax Receipt

After receiving a stock donation, the final step is to send the donor a tax receipt that complies with IRS requirements. This can get tricky if you’re new to stock donations because it’s not as simple as just saying, “Thank you for your $5,000 donation.” Compliant stock donation tax receipts don’t even list cash values, since your organization may not be qualified to appraise the value.

For stock gifts, your tax receipt must include:

• The name of the stock
• The number of shares donated
• The date of the transfer
• The name of your organization

Sending correct tax receipts is vital to ensure that your donors can claim their charitable tax deductions. Fortunately, while traditional investment advisors often don’t send donation receipts at all, Infinite Giving automatically sends them for you.

Once we’ve liquidated the donation and sent it to your brokerage account, our stock gifting platform automatically generates a tax receipt with all the necessary information and sends it directly to your donor. We handle all the details so you can focus on thanking your donors.

3 Reasons Why Nonprofits Should Accept Stock Donations

Donating appreciated stocks directly to nonprofits is a giving channel that is not often well understood or widely used. However, it’s also one of the easiest and most tax-efficient ways donors can give more to causes they care about.

Now that we’ve covered how to accept stock donations for your nonprofit, let’s take a look at three reasons why your organization should be asking donors for their stocks.

Watch this video to learn more about the benefits of stock donations.

1. Donating Stocks Is Tax-Efficient

Donating stocks directly to registered charities can be one of the most tax-smart ways for donors to give.

When a donor gives stock directly to a nonprofit, they may be able to avoid paying capital gains tax on the shares and still deduct 100% of the contribution's value. Thus, they can receive a tax write-off for the stock's market value upon donation, regardless of what they initially paid for it. Sometimes, the resulting tax deduction can even be more than what they originally paid! 

It’s a win-win. Donors save more. Nonprofits receive more.

2. Stocks Offer Immense Giving Potential

On top of their tax efficiency, appreciated stocks are everywhere. According to a study by Fidelity Charitable, “80% of donors own appreciated assets, such as stocks, mutual funds or bonds, but only 21% of those donors have contributed these types of assets to charity.” 

Generally, donors aren't making stock donations simply because they don’t understand the benefits, and nonprofits aren't asking for them.

A study by Dr. Russell James of Texas Tech University found that just mentioning strategic tax deductions increased charitable giving by almost 20%. Because donors hold more wealth in stock than in cash, stock donations tend to be larger than cash donations.

Nonprofits can solicit these high-impact gifts to capture this substantial giving potential.

3. Stock Donations Can Be Easy

Historically, giving and accepting stocks has been messy and overly complicated for both donors and nonprofits. Its benefits have been hard to understand, and nonprofits often don’t know how to help donors through the process.

Today, however, accepting stock donations can be easy. When your organization registers for a brokerage account with Infinite Giving, you’ll receive a giving URL that you can embed in your website, as well as your email and giving campaigns. With this link, donors can quickly gift their appreciated stocks to you.

On the backend, your organization can automatically send a stock donation acknowledgment letter and choose to hold, liquidate, or reinvest your new assets with a single click.

‍Plus, Infinite Giving charges 0% for stock donations (unlike other stock donation technology providers), offers advisory support, and opens a brokerage account for your nonprofit to simplify the process. Just take a look at how we stack up compared to other stock donation platforms:

Stock Donation FAQs

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How long does it take to set up a system to receive stock?

While traditional brokerage accounts at big banks can sometimes take weeks to open, a digital application with Infinite Giving can often be completed in the same day. Once your 501(c)(3) status is verified, your account could be active and ready to receive gifts in as little as three business days.

What specific information do we need from a donor to start a transfer?

To help ensure a smooth process, the Infinite Giving donation form typically requires seven pieces of information: the donor’s name, email, and brokerage firm, as well as the stock ticker, the number of shares, the donation date, and the nonprofit recipient. We then provide the donor with the necessary instructions to share with their broker.

Do we have to manually value the stock for the tax receipt?

Generally, no. As your fiduciary partner, Infinite Giving provides automated, IRS-compliant tax receipts once the shares enter your account. Because nonprofits are typically not qualified to appraise the specific value of a gift, we provide the essential details (such as the name of the stock and the number of shares) that the donor’s tax advisor can use for deduction purposes.

What happens to the stock once it reaches our account?

Following your specific account settings, Infinite Giving can automatically liquidate the donated stock upon receipt. The resulting cash can then be deposited into your bank account or reinvested into a diversified portfolio that aligns with your organization’s investment policy and long-term financial goals.

Can we receive other types of non-cash gifts through the same link?

Yes. In addition to stocks, the Infinite Giving platform is designed to accept other assets, such as crypto and Donor-Advised Fund (DAF) grants. Offering these various options can potentially help you engage a wider range of donors who prefer to give from their investment portfolios rather than their checking accounts.

Wrapping Up

Ultimately, stock donations allow for donors to give more to the causes that are meaningful to them and for nonprofits to maximize their fundraising potential. 

If your donors aren’t giving you stocks, it’s probably because you aren’t asking for them or because your current process is overly-complicated. Luckily, education and opportunity can open this giving channel up for your organization. With transparency and convenience, Infinite Giving can change your stock-giving narrative. Together, let’s help donors help you. 

Interested in other resources to help your nonprofit more effectively accept stock donations? We’ve compiled a list of tools and guides to help you out:

• Nonprofit Investing | The Ultimate Guide to Grow Your Giving. Nonprofit investing is just as important as the fundraising itself! Use this guide to learn about different ways and strategies for reinvesting the stock donations you receive.
• Nonprofit Reserve Funds: Using Capital & Operating Reserves. Want to learn more about how stock donations can help your nonprofit’s growth? In this article, we discuss how and why your nonprofit should prioritize growing its reserves.