As more nonprofit supporters become savvy investors, there is a new attraction in donating stocks, mutual funds or other non-cash gifts to organizations or causes.
These forms of support can be extremely helpful, but they can carry complications regarding taxation, including regulations imposed by the Internal Revenue Service.
Chris Johnson, director of marketing for StratusLIVE, advises that any nonprofit considering accepting stocks from donors adopt a strategic plan for solicitation. Here are a few points to cover:
- Get the organization’s tax/legal counsel to weigh in on developing the campaign.
- If the organization doesn’t have the internal resources to start such a program, bring in a partner organization. There are many reputable organizations with experts.
- Determine what types of gifts will be converted and what types the organization might decide to hold and use or hold and sell later. Make sure this is fully disclosed to donors.
- Make sure the campaign planning is included in the organization’s acceptable gifts policy documentation and training.
- Teach the organization’s teams to identify economic indicators that might suggest good timing for specific asks. The same is true for real estate.
- Create special marketing materials and staff training as part of the go-to-market strategy.
- Make sure to have the mechanisms in place to accept the gifts and convert them to cash quickly.
- Conduct wealth research on the existing donor base to find those individuals who are likely to be asset-rich. Introduce the program to them through marketing programs.