Werth-It Fundraising Blog

Here’s how a stock donation works for a charity:

You ask donors for “appreciated” stock.  The “appreciated” part is important: this doesn’t work if the stock has gone down.

You can ask donors for stock on your web page, through your newsletter, and in person.  Frankly, they spent the money on the stock long ago, so if they don’t feel they need it, it’s easier to give than cash from their checking account.

You’ll need to set up an account with a brokerage firm.  Ask around: someone may be able to set one up for a low fee.  It needs to be in the name of the charity, with appropriate papers signed by the officers.  One person should not have the code to it, in case they decide to abscond with the funds to the Cayman Islands (which don’t extradite).

Here’s what happens when a donor donates:

Let’s say they bought Exxon at $39 a share, and now it’s $90 a share, and further that they pay 28% a year in federal taxes.  Let’s say they donate 11 shares.  For your charity, that’s $990.  For them, it’s a cost of $429.  The tax deduction for them is $277.20.  Therefore, their cost to donate almost $1,000 is only $151.80.  Pretty amazing, huh?  From their point of view, they havent’ seen the money for years, and they’re just losing the $3 a share a year in dividends, so it’s worth it for them.  If the stock is appreciated enough, they might even make money from the deduction!

Questions?  Write me at katherine@werth-it.com.