Gifts of Stock

A donor is interested in making a gift of stock to our nonprofit, but we don’t have a brokerage account. How can we accept the gift?

You may be tempted to wonder why not just have the donor sell the stock and then give the proceeds to the nonprofit. That is certainly an option, but often it is to the donor’s benefit to give the stock itself. For example, if the stock is worth more than when it was purchased, the donor avoids having to pay capital gains tax on the difference—and you get a bigger gift.

If your organization already has a brokerage account, the stock can be transferred directly. If not, you can look into opening one. That’s a particularly good idea if you expect to receive such donations frequently. A stumbling block, however, is that such accounts often have a significant minimum deposit.

If you don’t have a brokerage account and are not in a position to open one, organizations like the Community Foundation of San Luis Obispo County can help you. A charity itself, the Community Foundation can accept the gift, sell the stock, and pass the proceeds to your nonprofit.

This is also a good time to review your gift acceptance policy and make sure it is clear as to whether or not you accept gifts of stock and, assuming you do, what you will do with the gift. Often, it is best to sell the stock the same day it is received. Here are two good resources for more information on this topic:

• Accepting major gifts of stock: 7 steps to set your nonprofit up for success
• Gift Acceptance Policies