by Barbara Barron | Posted February 19th, 2025 | Subscribe to this newsletter
We all know that tax benefits are not the sole – or even primary – reason people give to our organizations.
They give because they believe in the mission, or they are watching their own child thrive. Perhaps they had a transformative experience themselves while attending our school. That’s the why.
But the tax advantages of making charitable gifts are also real. When we, as advancement pros, do a better job of knowledgeably asking for the non-cash gifts that have huge tax advantages for our donors, we are often able to secure larger gifts.
Here’s some recent learning I got from another terrific FreeWill.com webinar.
That session looked at Schedule M data from 15,000 nonprofits. It was taken from 2022 and 2023 because we know that 990s generally lag a year or more. But their point was this: information can help us project what are likely the trends for 2025. The focus here is on stock gifts.
Some helpful stats. First this stunner:
62% of American adults own stock – even those who don’t have any savings! And that ownership is expanding.
And how about these?
Women tend to own more stock than men (62% vs. 59%)
41% of adults ages 18-29 own stock (Millennials + Gen Z)
67% of respondents aged 30 – 49 own stock (Elder Millennials + Gen X)
66% of respondents aged 50 – 64 (Gen X + younger Boomers)
Gifts of stock are typically much larger than cash gifts. Specifically, 10x-100x larger.
Nonprofits that accept stock gifts saw growth of 66% over five years. More stock gifts and more money raised.
K-12 schools saw a big jump in gifts of stock in 2023 ($22M)
Whew!
Clearly, this is a vital source of potential support for your school.
If you are not already accepting these gifts, run, don’t walk, to set that up. Make sure instructions are prominently displayed on your giving page. Spend time developing a good relationship with the school’s broker, if you have one. Create smart and efficient systems with your business office so you are notified immediately when a gift of stock is made.
So, what are the advantages of giving appreciated stock? First, the donor avoids any federal capital gains taxes by giving the stock to a charity. Next, they will avoid the additional capital gains tax some states assess. They receive a charitable receipt from your school — so they can declare the federal tax deduction on their return.
And finally, they can give your school a larger gift than they might be able to with cash. Win-Win-Win.
“Give us stock – keep your cash – save on taxes.” Essentially, that’s the message. (Although you’ll craft one that’s more elegant.)
Here’s another takeaway: the sector enjoying the biggest increase in stock gifts is higher ed. Why is that?
Well, we know that those programs tend to be well- resourced, and the development staff has experience and talent. They also tend to be rather competitive. But, it turns out, what really makes the difference, and we can all take this note, is they ask for stock gifts more. The more you ask, the more you get.
You don’t need to be a tax expert, but you most definitely need to be fluent in the basics of this important mode of giving. You need to get comfortable bringing it up. And your marketing of it needs to be robust.
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Some more good practices
What are some good practices?
· Make stock giving (along with other non-cash giving options) highly visible on your giving page. Think “ease in giving.”
· Include it in your appeals on multiple channels and platforms.
· Communicate about this 2 or 3 times a year, in particular during tax season.
Wait. What? Does this surprise you as it did me? The donor giving you a stock gift in March won’t be able to use that deduction until they file this year’s tax return next year.
It’s all about mindset. They are thinking about (and worrying about!) taxes now. That’s when we need to be talking about the ways a stock gift can benefit them and the school.
What else? Gather good tips and advice from a tax expert in your community to help you craft accurate and digestible messages. Make sure your data systems are tracking who gives you stock. Ask those donors to give stock again.
Other nonprofits are already doing this. Higher ed is crushing it. Why not your fine school? The good people at FreeWill.com have a cool AI tool called “Willy” that will quickly and easily help you create some messages to get you started.
Thanks for all you’re doing!
Barbara Barron
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BARBARA BARRON is one of the most respected and highly sought-after independent advancement professionals in the country, having worked with dozens of schools in every corner of the United States.
She has raised over $20 million for schools where she served as the Director of Development. Barbara is a New York Times bestselling author, speaker, and presenter who currently advises dozens of schools in various capacities. She is considered a thought leader in the world of advancement, with her writing widely shared by professionals in development offices worldwide.
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