Stock gifts made easy as you grow your endowment
Giving appreciated stock is an excellent way for your donors to support your endowment because the donor can avoid the capital gains tax, resulting in a larger endowment gift than if the donor had sold the stock, paid the tax, and then transferred what was left of the proceeds to your endowment.
As a charitable organization committed to growing your endowment, you no doubt work with donors who vary by age, experience, capability, willingness and more. But while you want to help them support your mission in any way you can, the demands of your day-to-day work may make it difficult to handhold each of them as they get into the details of fulfilling a commitment to make a gift of stock.
Furthermore, many donors hear about giving stock to charitable organizations through the mainstream media. Even so, it might still sound like a lot of work to them and, in addition, it does actually require a lot of work on your part, which can add even more strain to an already taxed fundraising staff.
This is where the community foundation can help! Our team is happy to work with you and your donors to make gifts of appreciated stock to your endowment fund at the community foundation. We’ll help the donor transfer the stock, including helping the donor track down all necessary documentation. We can also jump in to help determine the value of the donation so that the donor can properly report the donation on the donor’s tax return. And our team will handle selling the stock and investing the proceeds according to the terms of your endowment fund here at the community foundation. As always, our team will handle proper tax acknowledgment of the gift, and we will capture the gift in the quarterly statements for your endowment fund.
We know that you intend to do everything you can to grow your endowment, even in challenging economic times. That’s why we are happy to take some of the heavy lifting off your plate. It is our honor and pleasure to work with you and your donors to help grow your endowment to fulfill your mission for years to come and help people in our community for generations.
Inspiration for growth is a silver lining in philanthropy’s 2022 results
For only the fourth time in its history, Giving USA reported a rare decline in overall charitable giving in the United States. In 2022, Americans gave 3.4% less to nonprofit organizations than they did in 2021. Still, total giving reached nearly $500 billion, even though this number was dampened by stock market declines and inflation.
Certainly financial pressures at the individual household level contributed to the decline. In 2022, 64% of giving came from individual donors, but individuals’ portion of the overall giving pie has declined over the last decade with fewer households overall giving to charity in recent years.
It’s worth considering, if individual giving is so low, is there an opportunity for charitable organizations to double down on efforts to encourage individual giving–especially planned gifts to organizations’ endowment funds at the community foundation? Perhaps!
Here are a few ideas for your organization to consider as you begin to build your strategies for year-end giving and endowment building.
Tap into the empathy factor
Though the CDC declared the Covid-19 pandemic over as of May 11, 2023, those of us who work in the nonprofit sector hope the lessons about empathy and human connection will continue indefinitely. Consider sharing the Giving USA statistics with your donor base. Many donors appreciate the macroeconomic view of philanthropy and may be motivated to increase their giving when they understand the magnitude of the drop in individual giving and how it affects charities’ ability to serve the community they love.
Review the benefits of planned giving
Times may be tough now, but setting up a bequest to your organization’s endowment fund at the community foundation or arranging for another type of planned gift, such as an IRA beneficiary designation, does not impact a donor’s wallet today. Instead, these future gifts flow from a donor’s estate at death and are an important source of permanent funds to help the organization’s mission stay strong for many years.
Encourage donors to review their stock portfolios for appreciated assets
Even in a market downturn, not all stock is down! Your donors can make gifts of highly-appreciated stock to their endowment funds at the community foundation and avoid the capital gains tax, thereby giving your organization even more security for its future than if the donor would have sold the stock, paid the tax, and given the rest of the proceeds.
Our team is always happy to help you and your team build strategies to grow your endowment fund at the community foundation. We are here for you and the people you serve, now and in the future.
Summer giving trends
Giving at check out
Yes, fundraising is a numbers game, and you have to make a lot of asks to reach your goals, But it’s possible to take it too far, as some charities are learning when they dip into the cash register too many times.
Influencer philanthropy may be a double-edged sword
Has the influencer culture made its way into philanthropy for good? Some might think so, based on the fundraising success of MrBeast. But the approach is not without controversy, largely because charities face the same challenges working with influencers as those faced by for-profit businesses.
Charitable giving is getting a year-round boost
Charitable giving is not just for fourth-quarter holidays. More donors and charities are identifying opportunities throughout the year to celebrate an occasion by incorporating gifts to charity and charitable causes. It’s worth considering for your next fundraising campaign!
This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.