3 big mistakes around stock fundraising, and how to easily fix them

Hundreds of successful nonprofits are shifting their focus to stock fundraising in 2021.

Here’s why: the stock market is reaching new heights, new tax laws have upped the standard deduction, and research done by Dr. Russell James shows that organizations who focus on non-cash gifts grow six times faster.

But many nonprofits are making 3 key mistakes in their efforts to expand stock giving. Fortunately, there are some very easy ways to fix them. 

Solution 1: Use email to promote stock giving, and send widely. 

The biggest mistake fundraising professionals make around stock donations is only suggesting the option to higher income donors. However, according to a study by Fidelity Charitable, 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. 

When promoting stock gifts, it’s important to have a wide reach to ensure you’re educating all potential donors. Email messaging is an integral part of effective fundraising strategies, accounting for one-third of all online donations. Include a link to stock giving in all email appeals about regular fundraising to increase awareness, and to ensure your organization isn’t missing out on larger gifts from your existing supporters.

Solution 2: Educating your donors on the tax benefits of stock giving.

The most successful gift officers and online fundraisers make sure to remind people of the benefits of this type of giving. 

In a study done by Russell James, he found that mentioning tax deductions increased charitable giving by almost 20 percent. Don’t assume your donors already know — by giving an overview of basic tax benefits in your written communications, you can help to turn your existing donors into major givers.

For help getting started, use this stock email template to open the conversation with all of your existing supporters about the benefits of stock giving and how they can make a larger impact than they ever thought possible.

Solution 3: Expect an influx of gifts...just not right away.

Many nonprofit professionals believe that the first email about donating stock will bring an onslaught of gifts — this would be ideal, but isn’t realistic. Expect gifts to come in over time and remain consistent in your appeals and education around stock giving. 

Make it easy to donate stock on your website by including your brokerage info or providing clear instructions for donors.

Don’t fall behind here. According to the earlier study by Dr. Russell James, organizations accepting non-cash gifts saw 66% growth over five years. View this as an investment in your organization’s future.

By staying up to date and promoting stock giving, you can hit your personal goals and help your organization grow and promote its overall mission. 

To learn more about the tools that many nonprofits are using to increase stock giving, click here.

About the authors

Patrick Schmitt is the Co-CEO of FreeWill, a social venture that has raised more than $2B in new charitable gifts and commitments. Patrick previously ran email fundraising for President Barack Obama and served as the Head of Innovation at Change.org.

Magda Cychowski is the digital content and marketing specialist at FreeWill, working to raise hundreds of millions of dollars in new planned gifts for the world's greatest nonprofit organizations.