Unlock donor wealth by making stock gifting easy

This blog was written in collaboration with Steve Latham, CEO and co-founder of DonateStock.

Philanthropy is at an inflection point.

Today’s fundraisers face numerous headwinds—including a shrinking donor base, economic uncertainty, and massive cuts in federal funding. While most households may feel cash poor, millions remain asset rich. 

In fact, among the top 25% (35 million) of U.S. households, cash represents less than 10% of assets. The remaining 90% is in securities (like stocks, exchange-traded funds (ETFs) and mutual funds), donor-advised funds (DAFs), vehicles, real estate and other noncash assets. 

Yet, most fundraisers spend 90% of their time pursuing 10% of donor assets. This presents a significant opportunity for forward-thinking fundraisers.  

Why cash is not king

Russell James’ groundbreaking research illustrated the substantial benefits of reducing reliance on cash gifts. In short, fundraisers that grow noncash giving faster than cash giving outperform those that rely predominantly on cash. 

The table below shows how nonprofits that solicit cash and noncash gifts grew almost 5x faster than those that relied solely on cash. Organizations that solicited stock gifts grew even quicker.

The king of noncash assets

Noncash gifts can include stocks, bonds, DAFs, IRAs (qualified charitable distributions), cryptocurrency, vehicles, real estate, art, antiques, and more. Among these, public securities—such as stocks, ETFs, and mutual funds—are the largest and most widely held.  

Today, more than half of U.S. households own more than $40 trillion in stocks, ETFs and mutual funds. Based on the number of potential stock donors, annual stock gifting should exceed $95 billion.

Why stock gifting?

Gifts of stock and mutual funds offer compelling advantages for donors and nonprofits alike.

Donors can avoid capital gains taxes and deduct the full market value of appreciated stock held for more than one year. As illustrated, the tax savings can be significant:

• A donor who invested $1,000 in NVIDIA (NVDA) five years ago now has stock worth approximately $14,000 that they’d like to donate to your organization.
• If they sell the stock, they’d have to pay as much as $4,500 in taxes (depending on the state) on the $13,000 capital gain. This would leave them with only $8,500 to donate.
• If they donate the shares instead, there’s no tax on the gain, and you would receive $14,000 versus $8,500. The donor also receives a much larger tax deduction of $14,000. 

Appreciated securities allow for much larger gifts (averaging $7,000 in 2024) with unmatched tax benefits. When donors gift stock, everyone wins.

The stock gifting gap

Despite its benefits, stock gifting has been drastically underutilized for a few key reasons: 

1. Lack of awareness: Few donors are aware of this option, let alone understand its tax benefits.  
2. Cumbersome process: Traditional stock gifting is a manual and time-consuming effort for donors and advisors. 
3. Fundraiser reluctance: Many fundraisers avoid promoting stock due to the perceived complexity and difficulty in reconciling gifts that arrive without the donor’s identity. 

DonateStock’s analysis of 100,000 nonprofit (990) tax returns revealed that only $11.7 billion in stock gifts were made directly to nonprofits (excluding DAFs) in 2023. If you exclude the small number of mega-gifts, the normalized total was only $1.4 billion.  

This makes appreciated securities the single largest untapped source of charitable funding. 

Introducing an easy button for stock gifting

Technology and innovation remove barriers to stock gifting, making it accessible and manageable for organizations of all sizes. 

How DonateStock makes stock gifting easy

1. Simple donor experience: What once took hours, now takes five minutes with DonateStock’s Easy Button for Stock Gifting™.  Real-time notifications and dashboards deliver transparency throughout the process, improving the donor experience and encouraging recurring gifts. 
2. Full transparency:  With a birds-eye view of all stock gifts, past and present, there’s no more confusion about which donor gifted which shares. Mystery gifts largely disappear, saving countless hours while enabling better donor stewardship.
3. Ability to scale: By automating manual processes, such as facilitating transfers, liquidating securities, reconciling donations, and producing acknowledgement letters, you remove operational friction. More than 90% of DonateStock’s customers process and acknowledge stock gifts through their 501(c)(3). By offloading the busy work, fundraisers can exponentially grow stock gifting while freeing up their team to focus on more important tasks. 
4. Enablement and support: Recognizing that stock gifting is still confusing for many, DonateStock provides live training, playbooks, toolkits, content, and guidance to educate donors and advisors. 

Stock gifting integration with GoFundMe Pro

With the DonateStock and GoFundMe Pro integration, nonprofit teams can simplify the management and tracking of stock donations. Once connected, stock gift transactions sync directly into GoFundMe Pro and can pass directly to your customer relationship management software. 

This automation reduces the manual effort typically required to process and reconcile stock gifts. More importantly, it gives fundraisers valuable time back to engage donors, craft appeals, and advance your organization’s mission. With technology handling the administrative complexities behind the scenes, your team can stay focused on what matters most.

Stock gifting in action

One nonprofit benefiting from stock gifting is World Central Kitchen. By making stock gifting prominent and easy for donors, World Central Kitchen saw stock gifting grow from 1.3% of proceeds to almost 9%—a 6x relative increase versus other channels. 

World Central Kitchen also saw tremendous efficiency gains. By outsourcing the back-end process of selling, reconciling, and acknowledging gifts, it scaled its program without increasing head count. 

Explore the full case study to learn how World Central Kitchen made it happen.

Bringing it all together

Appreciated securities represent trillions in untapped potential. By encouraging donors to share their wealth, nonprofits can grow faster and reduce their reliance on cash. 

The opportunity is clear: Millions of donors have appreciated assets ready to give. All they need is for you to ask them for it and give a simple way to act.

With barriers removed, stock gifting offers a meaningful way for donors to contribute their assets, providing opportunities for growth, deepened relationships, and mission advancement. To learn more about the DonateStock and GoFundMe Pro integration for stock gifting, get in touch with our team today.

Copy Editor: Ayanna Julien