As church leaders, at any given moment you could be having a collection of well-meaning sales reps infiltrating your inbox, selling you on how they can help your organization or church.
I know, because I am a pastor. I am also the founder of Overflow, a platform that helps churches unlock new levels of generosity through stock or cryptocurrency.
You may be thinking, "that's nice, but our donor base doesn't own that much stock."
At one point, I did too.
For generations, passing around the offering bucket was the standard means in which churches facilitated generosity. Then the internet came. Then Facebook. Then smartphones. Then apps.
And now, online giving is the standard.
What’s remarkable, though, is that statistics have shown we have yet to tap into possibly the biggest sources of generosity in stock and Crypto.
Creating a channel to facilitate stock donations has the potential to transform your giving infrastructure completely. Net-new generosity, gifts that wouldn’t have come in otherwise.
Just ask VIVE Church, as they recently raised funds for their new building.
"I know for a fact that without Overflow we wouldn’t have raised the $3M [in stock],” Aaron Williams, VIVE CFO, emphasized.
Still, questions persist, as they did for me. So let’s unpack them.
Do Most People Own Stock?
Let's start with whether or not most people even have stock.
Remarkably, research has shown that the majority of Americans actually do own stock and other financial assets outside of just cash.
The Signatry, a donor advising company, found that "90% of the average American citizen’s wealth is in non-cash or complex assets, such as stock or business interest."
And in the tech industry, an often transient sector, companies are giving stock to incentivize employees to stay / foster buy-in to the company. Per Bloomberg, Apple has been offering stock bonuses that "have ranged from about $50,000 to as much as $180,000" to retain employees considering a move to Meta (formerly Facebook) or other tech giants.
In an increasingly digital world in which traditional fiat currencies aren't exactly invincible (the ruble, Russia's currency, has lost 20% of its value in just a month), employees like the idea of longer-term security via stocks.
Given that, it's now a matter of changing the narrative to show that giving stock is both feasible and possible. As with any new thing, it takes time for a new technology to be integrated and normalized into our society.
The core issue right now is that they have it, but don't think they can give it. And it isn't just people in the tech industry or Silicon Valley that receive stock bonuses or own other assets.
A 2016 study by Fidelity Charitable found that: "80 percent of donors own appreciated assets, such as stocks, mutual funds or bonds, but only 21 percent of those donors have contributed these types of assets to charity."
Only 21% donated.
So it could be one of two things: either they simply do not want to donate stock, or they do want to donate it, but aren't aware of both the benefits and process of stock donation.
Benefits of Stock Donation
What are a few basic benefits of donating via stock?
The reality is that even in a traditional checking or savings account, money doesn't appreciate very much. Interest rates are so low - typically 0.01% annual percentage yield (APY) – that your recurring monthly gift will likely look the same.
However, a stock has the potential to appreciate significantly, which in turn pours more money into your church. This is something to be emphasized to your community, as people like to know that their money is being put to good use.
A good example of this is the aforementioned VIVE Church, in which their new church building campaign was propelled by stock and crypto donations. With the help of Overflow, half of the $6 million raised in 45 days was given via stock.
By giving stock, you're giving more. Per Fidelity Charitable, "by donating stock that has appreciated for more than a year, you are actually giving 20 percent more than if you sold the stock and then made a cash donation."
This is because the 20% capital gains tax rate (for long term holdings) is taken out when the stock is directly donated. Right off the bat, this takes out what would be a significant tax hit otherwise.
Here's what that looks like, practically:
Dan has an appreciated stock worth $30,000. However, he'd be subject to $6,000 in capital gains tax if he sells and gives it the "traditional" way. By giving his stock directly to his local church or organization, he saves $6000. When you consider saving for something like a new building or ministry, that additional $6000 makes a huge impact.
Another upside is that stock donations are tax deductible. By itemizing the deductions, you can reduce the tax burden on your overall income. That may not seem like a huge figure or a huge deal, but in the world of nonprofits and churches, every dollar and cent counts.
Lastly, from a more intrinsic standpoint, giving has been shown to make us happier. Empowering others and causes we believe in has a reciprocal effect on us, even one that has nothing to do with money.
According to a recent article from the University of California, Berkeley: "the National Institutes of Health found that when people give to charities, it activates regions of the brain associated with pleasure, social connection, and trust, creating a 'warm glow' effect."
What's the Process Like?
We live in a world where you can order a bathtub off Amazon Prime and have it arrive at your doorstep within two hours.
Which goes to say, even if we know the benefits of something, most won't act upon it if it's complicated, confusing, or difficult. Our culture is built on convenience.
And in the past, that's certainly been the case with donating stock.
It was painfully manual and took way more time and energy than most people had at their disposal. It could take weeks, months even. Are the benefits really worth the headache?
This is part of the problem we’re solving at Overflow. We recognized the experience of donating stock wasn't user-friendly, and has in turn simplified the process.
Nowadays, donating stock can be done using the Overflow Donation Platform with a few basic steps:
- First, the platform links directly to your portfolio
- Next, the stock donation is sent directly to the nonprofit
- Tax deductions are automatically factored based on the "Fair Market Value" of the stock.
Initiate within minutes, settle within days.
If you’ve ever spoken to an Overflow member, we encourage you to reach out and follow-up with them for assistance. Otherwise, you can book a demo for a complete walkthrough, where any question or concern can be addressed.
The hope is that as a leader or vital team member of a nonprofit or church organization, you can see stock giving as a more realistic possibility. The proof is in the pudding that stocks are something people have, want to give, have incentive to give, and now have the tools to give.
We just threw a lot of information at you, so in summary, here are the major takeaways:
1) Many people have stock, but don't give it. This is revealed from the telling stat from Fidelity Charitable that "80 percent of donors own appreciated assets, such as stocks, mutual funds or bonds, but only 21 percent of those donors have contributed these types of assets to charity."
2) By giving stock, you're giving more. By donating stock that has appreciated for more than a year, you are actually giving 20 percent more than if you sold the stock and then made a cash donation. This is because you can get some major tax deductions, such as avoiding capital gains tax or being able to "deduct the full fair-market value of the asset you donated from your income taxes."
3) Giving stock is now easy, thanks to Overflow. Check out this video for a step-by-step tutorial on how to use Overflow's giving platform – a quick and easy process that takes a matter of button clicks.
Usually, things are too good to be true. But in this case, it’s not. It’s only a matter of time before you see an ROI on your investment into Overflow.