Do you ever come across a solution to a problem you didn’t even know you had?
This happened to me recently.
I came across StockDonator.com – a company designed to help nonprofits accept donations of publicly traded stock.
Then I posted on my instagram asking if accepting stock donations is something that my clients are doing now – or if they have questions about it. What I heard from both clients and other fundraising consultants confirmed my thought – this is a solution to a problem I didn’t even know existed.
You know I love a win-win partnership – and I’m always looking for ways to strengthen them.
Turns out, stock donation is the ultimate win-win. And Stock Donator makes it so that no one needs to miss out.
Here’s the thing. When a donor sells stocks to then donate money to you (say during your year-end campaign) – they have to pay about 20% in capital gains taxes, PLUS the brokerage fee to sell that stock and donate the value to you.
BUT!!! If they donate that stock DIRECTLY to your organization – they get to use the full stock value as their write off – and you get the full stock value as a donation.
Plus, no one has to pay taxes on capital gains.
Let me say that again – you can receive more than a 20% increase in the donation amount – while costing the same to your donor.
Here’s some (very simple) numbers for an example:
Cash donation method
- Donor invested $1,000 to buy certain stocks
- The stock has increased in value over the past 12+ months, so now it is worth $2,000
- Donor sells the stocks and pay 20% capital gains tax on the $1,000 difference on their investment =$200.
- Donor then has $1,800 to donate to your organization, and write off on their taxes.
Alternative donation method
- Donor invested $1,000 to buy certain stocks
- The stock has increased in value over the past 12+ months, so now it is worth $2,000
- Donor donates stock directly to your nonprofit when stock is valued at $2,000 – and gets to write off $2,000 donation on their taxes.
- Your organization now can sell the $2,000 in stock and receives $2,000 in support for your programming.
There are a few other elements that your donors need to be aware of for this to be beneficial to them:
- Needs to be publicly traded stock
- The stock must have been owned for more than 1 year
- Must be stock that had gains – if it was a stock that had losses it is not advantageous to the donor to donate directly to the nonprofit
Also, if everything above feels confusing to you, don’t worry! That is what Stock Donator is here for – to make it simple and provide you with all of the technology and communication tools for you to be on your donors team so they can maximize their investment in your organization.
This is a tool I wish I had known about when I was an Executive Director asking my large donors for their year end donations – I hope you appreciate it too.
For more information on Stock Donator and how to sign up so your nonprofit organization can accept stock donations directly from your donors visit www.StockDonator.com/Mallory.
