How Receiving Stock Donations Is Losing You Money

5 Minute Read
Posted by Overflow Team on August 10, 2022

Tags: Success

How Receiving Stock Donations Is Losing You Money.

Did you know that the way your nonprofit accepts stock donations could be costing you money? Most people donate to nonprofits because they want to help out, but did you know that there are better and more efficient ways for your nonprofit to receive donations? In this blog post, we will discuss the benefits of donating stocks directly to charities instead of going through a middleman. We will also provide tips on how to make the process easier for both the donor and the charity!


Is Your Stock Donation Process Harming Future Projects?

Whether you consider the fact that stock donations tend to involve far higher sums, it's important to have a seamless and easy process in place to receive support. But there are many nonprofits still struggling to accept this form of financial help. But that's whether Overflow can help. Acting as a middleman between those donating to nonprofits and nonprofits and charities themselves, Overflow makes it easier than ever to accept stocks and other forms of support. With an affordable upfront fee, you can optimize your donation process and ultimately increase the types and amount of donations you can accept.





How Does Overflow Work?

Over 1 million charities and nonprofits in the US alone are limited in their ability to accept non-cash donations. And here's how the traditional process of accepting stock donations is harming your ability to change a positive change in the world.

First off, you have to work with each donor to send and process a stock donation form, and ensure that the gift gets accounted for correctly. (And that's assuming that your nonprofit even has a brokerage account the donor can work within the first place.)

Next, an acknowledgment letter has to confirm the accuracy of the transaction. If anything gets filled out incorrectly, the process has to be restarted and amended. This involves several people from your organization having to track, manage, and process an individual gift every single time. Think of it as writing and mailing a check for every bill you have instead of setting up AutoPay.

Scott Patton, director of development for the nonprofit RIP Medical Debt, spoke about the tedious nature of constant communication with donors – a major time drain for him and his colleagues.

"We had donors. I mean, I would have half a dozen inquiries saying: ‘hey, where can I send this or make these stock donations?’ I would say that it was marked first by being under-resourced from a time perspective and then being under-resourced from a communication and transparency perspective," Patton said.

Time aside, many may not realize how much money can potentially be lost as donors get caught up in the weeds. Companies like Amazon or Disney have turned to subscription-based models to ensure convenience and customer retention. The fact that we can use our thumbprints or FaceIDs to make a purchase or that we pay a little extra for two-day Prime shipping reminds us that the path of least resistance is highly appealing.

Mark Francey, the pastor of Oceans Church, added: “We all know that the window of people's hearts being generous isn't always a long window, and it's kind of a short attention span. For us, it's [awesome] that someone could click on a link and really from start to finish or give stock or give something that's valuable to them. It's a short [30-60 second] transaction as opposed to calling Merrill Lynch or Ameritrade and saying, "I want to transfer this here and there." And then 40 people are involved. You'd have to be pretty dedicated to go that route."

Receiving stock donations is losing you money (3) (1)



Modernize Your Donation Process With Overflow

Overflow can help simplify and shorten the overall process of donating to nonprofits. In fact, we help and work with over 200 nonprofits and churches across the US. And we've had an overwhelmingly positive reception to our giving platform, as donors feel confident in both the experience, security, and reliability it entails. This has, in turn, encouraged and enabled them to give both consistently and generously, evidenced by the fact that as of May 2022, the average Overflow donation is 120x higher than a typical cash/credit donation.

Think of us like a magnifying glass that amplifies the generosity that's already there. In addition to saving time, we help make donors happy and content with the process. As Scott Patton reiterated:

"​​The time savings is significant! That, plus the better user experience for our most important donors, is well worth the subscription fee.”

We know you may already be aware of the value of stock donations, as stated before, but the point we're trying to drive home is that keeping an antiquated stock giving process hinders how effectively stock donations can be used as a tool.

From a technical standpoint, our clients receive access to our user-friendly giving platform. From a public-facing standpoint, you can easily add a button to your organization or church's website that links them to the Overflow giving experience. Let's say you decide to use our stock giving platform – here's how it works:

1) First, a donor clicks your 'Give Stock' link and is able to connect their brokerage account to see their portfolio and select which shares they want to give.

2) Next, once the shares are selected by the donor, they authorize the gift to be sent to your organization and then submit.

3) Once submitted, the shares are transferred from the donor's brokerage account directly to the nonprofit.

4) Overflow automates the generation of Charitable Acknowledgement Letters to enable you, the nonprofit, to send the completed letter to the donor with a click of a button.

Book an Overflow Demo

Experience the power of Overflow for yourself with a free trial. Book an Overflow demonstration and a 15-minute introductory call today.