Your members want to donate stock, so why won't you let them?

13 Minute Read
Posted by Overflow Team on May 31, 2022

Right off the bat, this might sound like a bit of a strange title. "My organization can already accept stocks, and if they want to donate stocks, they already can."

But let's clarify terms. We aren't saying you're proactively stopping your donors from donating stock, but rather that your lack of a convenient stock giving method could be preventing stock gifts from flowing in.

We've talked in-depth about how the traditional way of giving stocks is cumbersome and frustrating. You can read more extensively in that blog, but the basic gist is this:

1) The donor has to fill out an extensive form to process the donation
2) An acknowledgment letter must be sent out to confirm accuracy
3) If anything is filled out incorrectly, the process must be started over again.
4) It's time-consuming and requires back and forth communication between the donor, organization, and brokerage.

In an age where we do everything online (from paying bills to having meetings), this process is foreign and time-inefficient.

Our CEO, Vance Roush, encountered this issue personally, and it actually served as the inspiration to start Overflow. Serving as an executive pastor at a church, he was hoping to leverage the power of stock donations for his community. However, he was confused when stock donations that were promised weren't showing up.

He followed up with one of the potential donors, who told him: "Vance, I'm so sorry. The information you gave me is great. I gave it to my brokerage account and they told me to download a form physically, fill it out and fax it in. I just haven't had a chance to do it. But I'll get it done."

This is yet another reminder that donors really do have stock and they want to give it. However, if they feel there's a barrier to entry, they're less likely to commit to giving.

Think about how many times we forget to pay a bill because it's not on autopay. When processes are convenient, we're way more satisfied with the overall experience and more prone to follow through.

But the need for a reliable stock donation platform isn't just about convenience. There's myriad benefits to opening up the door for stock gifts for both your organization and your donors. The popularity, extensive tax benefits, and larger average gift sizes makes being able to accept stocks reliably a priority for your nonprofit or church. Economics says high demand is ripe for the picking if you can provide the supply. In the same way, what would happen if you opened up this new avenue of giving for your members?

90% of wealth is in non-cash assets

Growing up, our piggy banks gave us the false sense that we had to stash our cash and build up our stockpiles. But statistics show that most Americans aren't hoarding huge amounts of cash. In fact, 90% of the average American's wealth is held in non-cash assets, per The Signatry.

Right off the bat, that shows us that there's a huge financial source to tap into. Moreover, a good amount of those non-cash assets are actually stocks. It's estimated that 145 million Americans own stock, which is close to half the country.

Despite the above stats, over 80% of donations are done via cash, which doesn't seem to add up. Why are we giving from the least of our resources?

Oftentimes people pull out their checkbooks to give or drop a few dollars in the offering bucket because "that's the way it's always been done."

Changing the narrative to strategically give from our appreciated, sustainable resources is crucial. If you polled either your donor base or your congregation, odds are a good amount of them have stocks and are willing to give them.

Tax benefits for the donor

Benjamin Franklin once mused that "in this life nothing is certain but death and taxes." While figuring out taxes can be anxiety-inducing every year, your tax burden doesn't have to be as heavy as you might think.

Though tax breaks aren't often the driving force behind someone's decision to give, they are a nice added bonus and enticement.

We can get tax write-offs for most donations we make (depending on how much we give), but when it comes to stock giving, many lose out on some big savings. They mistakenly think that they have to liquidate (or sell) their stocks and then give the profits to their respective charity, nonprofit organization, or church of choice.

Unfortunately, the government still considers that a capital gain, and therefore it's subject to the 20% capital gains tax. However, giving appreciated stock directly gives both a growing gift and saves the donor from having to pay the 20% tax. When you're dealing with stock gifts, which tend to be higher amounts (as of May 2022, the average stock gift given through Overflow is $12,000), that's a huge deal. Taking away $2,000 from a $12,000 gift is a tough pill to swallow, as that's a significant amount in the church/nonprofit world.

Beyond just circumventing capital gains tax, you can also take a tax deduction for the fair market value of the stock, per Fidelity Charitable.

$40 billion stock given, despite all the challenges

Despite the hoops people have to jump through without a stock giving platform, total global stock giving was a staggering $40 billion last year.

That's impressive considering the legwork it takes to procure a stock gift. So just imagine what that figure would look like if everyone was donating via a simple process.

Countless studies have shown that people are bent towards generosity and want to give. It makes us feel good, it connects us with people around us, and it even produces mood-regulating hormones in our brain. Whether you slice it from a biological, spiritual, or financial level, you can't really go wrong with giving.

Generosity is like an ocean wave: lots of potential energy that can go to waste if it's left to crash on the shore. However, if the inherent desire to give is honed properly, the sky's the limit.

You may not want to think about gas prices right now, but consider what would happen if diesel gas was sold but no cars had diesel engines. The supply would be there, but it wouldn't be used for anything.

Similarly, the immense giving power and excitement around generosity needs the right funneling to get to where it needs to go.

Enter Overflow.

How Overflow works

Our entire mission at Overflow is to inspire the world to give. We aren't forcing people to be generous – we know they already are. We see ourselves like a point guard setting up an assist. Ultimately your donors are the ones providing the slam dunk, but sometimes they need a little help getting there. We facilitate stock (as well as crypto and cash/credit) giving and handle every aspect of the process.

What does that look like?

First off, our clients receive access to our user-friendly giving platform. You can easily introduce this to your donors by adding a button or portal to your website that links out to Overflow. Once they click on it, they'll be taken to a simple screen with a few boxes.

1) By clicking the 'Give Stock' link, the donor 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.

And on the back-end, Overflow provides unparalleled customer support, meaning if you call us, you'll talk to a real human being that's dedicated to solving the problem.

Here's how one of our clients, Tarik El-Ansary, pastor of administration and finance at Reality San Francisco, described his experience:

"It's as good as it can get, really. I feel completely supported. I don't have to worry about anything. You guys are available. There's high communication around a lot of different things," he said.

Book an Overflow demo

We'd never ask you to commit to something without first having a preview or a test run. If you're curious or intrigued by what Overflow does, we encourage you to book an Overflow Demo.

This is a quick, no-strings attached call to walk through what a potential partnership might look like, and answer any questions you might have. It won't take more than 15 minutes of your time.

If you’ve ever spoken to an Overflow team member, they'd be happy to continue the conversation. One of the areas we pride ourselves on is being constantly accessible and available.

Or if you're simply curious to learn more about stock & crypto giving, or the benefits of stocks in general, we encourage you to check out our blog.