Jumpstart Endowment Growth 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 or your organization’s endowment fund at the community foundation? Sometimes a donor is in a hurry, doesn’t think it through, and writes a check 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 to your endowment fund is very easy. Seamless processing for stock gifts is one of the many benefits of establishing your organization’s endowment fund with the community foundation. 

As always, please reach out to WCF for ideas and strategies to build your endowment fund through donors’ gifts of stock. We’d love to help you seize the opportunity! 

Whidbey Community Foundation is a resource and sounding board as you serve our community. This is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.