Unlock Tens of millions in New Funding through Inventory Donations

Nonprofit organizations, greater training establishments, and healthcare foundations are embracing inventory gifting to diversify and develop funding because the rebound begins from two difficult years for charitable organizations. If you happen to’re new to inventory donations or wish to develop your program, you’ll want some context (and a few charts) for example how one can unlock thousands and thousands in new funding by making inventory gifting quick, secure, and free for donors.

After charitable giving hit a file excessive of $516 billion in 2021, momentum stalled in 2022. Inflation, greater rates of interest, and financial uncertainty, mixed with a shrinking pool of donors, resulted within the first contraction in giving in additional than a decade (down 13%, adjusted for inflation.) Giving USA reported that charitable giving was down one other 2% in 2024, when adjusted for inflation.

The pullback in money giving is forcing fundraisers to hunt new methods to diversify and develop income. On the prime of the listing is a renewed deal with non-cash giving, and inside this asset class, inventory represents the largest alternative.

Why Inventory Donations?

Gallup lately reported that 61% of People now personal inventory, together with 66% of these over 50 and 84% of households incomes $100,000 and above. Mixed, this group owns $40 trillion in shares, exchange-traded funds (ETFs), and mutual funds.  The highest 10% of buyers characterize $50-$75 billion in potential annual funding for nonprofits.

Items of inventory supply advantages to each the recipient group and the donor.

1. Tax financial savings: Appreciated inventory represents tax benefits for donors who help nonprofits.
2. Donors can keep away from capital beneficial properties tax and deduct the present worth of inventory held for greater than 12 months. 
3. Pre-tax inventory items enable the recipient group to maintain the proceeds that may have been paid in taxes had the donor offered the inventory earlier than donating the proceeds.
4. Elevated dimension of items: Inventory donations are typically bigger items than money donations, averaging greater than $6,000 in 2023 and greater than $7,000 in 2024.

The implications for organizations: most (if not all) midlevel and main donors personal appreciated inventory and donating inventory versus money presents substantial financial savings for donors. For these causes, inventory gifting must be a fundraising precedence for organizations of all sizes.

Why Now?

After its superb resurgence, the inventory market is at or close to all-time highs. In simply the previous 10 years, the S&P 500 has nearly tripled whereas the NASDAQ 100 has nearly quadrupled, representing trillions in unrealized beneficial properties held by donors. 

When the markets soar, thousands and thousands of buyers search to reap beneficial properties, mitigate danger, and cut back focus in shares which have had outsized beneficial properties over the previous 5-10 years. Buyers typically have two choices:

1. Promote the shares and pay a tax on the beneficial properties
2. Share their beneficial properties tax-free with the causes they help

These within the know are profiting from the tax advantages to donate inventory to the causes they love. However not all of your main and midlevel donors are conscious of the advantages of donating inventory. Right here’s the way to get began:

• Begin by selling inventory gifting in your Methods to Give web page and Donate web page, letting supporters know you’re now accepting inventory donations.
• Then, create an e mail advertising marketing campaign to encourage and inform donors about the advantages of donating inventory to charity, with particular emphasis on the finish of the yr to remind them of the tax benefits.
• To make it even simpler, try the listing of one of the best shares to donate and share together with your donors the the reason why these shares are significantly ripe for gifting.

Is This Your Yr for Inventory Donations?

There would possibly by no means have been a much bigger second than now for fundraisers looking for to diversify and develop through non-cash giving. Because the charts under present, nonprofits, healthcare foundations, and better training establishments are beginning to get the message.

On the midpoint of 2024, inventory items on the DonateStock platform (representing 1000’s of organizations) have been up 65% whereas proceeds from inventory gifting have been up 285% vs. 2023.

A New Strategy to Develop Inventory Gifting

Whereas the donation of shares was once a painstaking, guide course of for donors and the charitable organizations receiving the proceeds, it’s now accessible and simple for everybody. Gone are the times of sharing your brokerage particulars with strangers, requiring donors to finish paperwork, and manually processing, reconciling, and acknowledging inventory items. A number of instruments might help you, together with software program from my firm, DonateStock. When your donor submits a present through on-line donation type, they’ll provoke an internet reward of inventory in minutes for free of charge.  From there, it’s easy to your donor and to your reward processing crew:

1. Your donor selects their group of selection on the net donation type supplied by a inventory donation instrument built-in into your donor administration system, akin to Blackbaud Raiser’s Edge NXT®
2. The inventory donation instrument, akin to DonateStock, robotically and securely sends directions to the donor’s dealer and notifies the donor and the charitable group
3. The donor’s dealer transfers the inventory to the recipient’s account
4. The inventory is acquired, reconciled, transformed to money, and the proceeds are distributed to your group
5. Your donor is notified the inventory was acquired and is shipped a receipt for the reward

Additionally think about donor satisfaction. Inventory gifting leads to nearly 25% of inventory donors making repeat items. In 2023, inventory donors made a mean of three.7 items every, indicated within the chart under.

For organizations which are Blackbaud clients, it couldn’t be simpler to get began. It takes only a few minutes to your group to robotically course of and acknowledge inventory items effectively and transparently. Activate DonateStock in minutes one in every of two methods:

To be taught extra or to get began with quick, secure inventory donations, please go to the DonateStock web page within the Blackbaud market.