“Growth is never by mere chance; it is the result of forces working together.”

-James Cash Penney

This is an easy way to increase fundraising contributions and there are benefits for both parties if the transaction is handled properly.

Using a donor-advised fund to make the donation instead of giving it through a private foundation or withdrawing it, will give starters a higher tax reduction.


Benefits to the Donor

  • The donor can avoid capital gains tax and withdrawal fees and penalties
  • The donor can take a tax deduction for the full fair market value of their contribution at the date of transaction


Benefits for the Receiving Organization

  • The organization has an additional source of funding
  • The organization potentially will receive a 20% increase in the contribution amount since the donor is assigning the stock over to them without paying taxes and fees


What Should You Do to Get Started Today?


1. Set up a brokerage account


2. Create a letter of instruction

Standard letter for stock donations that you can email, fax, and post on your website


3. Establish a formal Investment Policy

What you accept from it and what you are going to do with it (sell/reinvest) — FYI: stock in a non-publicly traded company is less liquid restrictive and may incur additional costs to convert.

The best and most commonly used practice is to sell all stock immediately upon receipt


4. Set up a tracking system and assign responsibility for it

Key tracking items:

  • Date of receipt
  • Value of stock on that date
  • Stock ticker
  • Number of shares
  • Date of sale
  • Value of stock at sale
  • Any administrative fees


5. Send your IRS requirement Thank You and Acknowledgement letter.

This letter should be sent to the donor for anything over 250 ($250 dollars or 250 donations?) donations. Your organization will want to make a statement to the effect that, “no goods or services were provided by your organization in exchange for the donation.”