Why Can’t We Be Friends?
Many charities avoid asking donors to give non-cash assets like stock or real estate because they don’t have the infrastructure to handle those gifts. They also shy away from talking about more sophisticated giving techniques, like charitable gift annuities, because they don’t have their own program. If this describes your organization, you’re in luck – there are several partners out there who want to facilitate these more complex gifts for you! They want to be your friend.
Let’s take a look at some of your options…
Many people have heard of their local CF, but they don’t really understand what they do. They offer many services to donors, nonprofits, and the community at large. Did you know that many of them are ready, willing, and able to accept a variety of non-cash assets on your behalf? They do this in a variety of ways and the specifics depend on their own internal workings.
Let’s look at some of the ways I’ve seen community foundations accept non-cash assets to support other nonprofits.
Pass-Through Gifts: A community foundation accepts a gift from a donor, liquidates it, and passes the sales proceeds on to one or more charities the donor selects. They may retain a small percentage of the sales proceeds to cover their staff time, but it’s usually not more than 3-5%. That’s a pretty good deal! They do all the work. You get a nice check minus a small fee. Everyone wins!
Donor Advised Funds: A community foundation accepts a gift from a donor, liquidates it, and places the proceeds in a fund that the donor creates. Grants from that fund are then sent to the charities of the donor’s choice. DAFs come in a few different flavors and the main differences are how fast or slow the grants come out. If you want to learn about the different types of DAFs, check out my online course that covers virtually everything you ever wanted to know about them.
Gift to Your Community Foundation Fund: A community foundation accepts a gift from a donor, liquidates it, and places the sales proceeds into a fund that your nonprofit has established at that community foundation. That fund may distribute grants back to your organization or other charities you select. You get the benefit of their expertise in accepting non-cash gifts, but also their investment expertise. They invest in large quantities and may have access to investments only available to larger institutions.
Charitable Gift Annuities and Charitable Remainder Trusts: A community foundation works with your donor to establish a Charitable Gift Annuity (GA) or Charitable Remainder Trust (CRT) that they administer. They accept the gift, draft the paperwork, handle the investments, make payments to the income beneficiaries, and take care of all tax reporting. At the end of the GA or CRT, the remainder is distributed directly to charities the donor selected or it may go into a fund the donor created a the community foundation to be distributed to charities over time.
If your local community foundation doesn’t run their own Charitable Gift Annuity program, you may want to check out the National Gift Annuity Foundation. This nonprofit issues gift annuities for a number of charities all over the United States.
The National Council of Foundations provides a handy-dandy online Community Foundation Locator. Check it out and find your nearest foundation.
There are some partners that specialize in accepting specific types of assets, such as stock and cryptocurrency.
DonateStock: This organization facilitates gifts of publicly-traded stock from donors to virtually any nonprofit. They make it very easy and affordable. They offer a couple different options for nonprofits to choose from and one of those options even includes a simple button for your website where donors can click and arrange their stock donation to your organization. Stock is usually the first type of non-cash gift that nonprofits start to accept. It’s the easiest and most common type of non-cash gift for donors to make. If you’re just dipping your toe into accepting non-cash gifts, stock is probably the place to start.
GivingBlock: This organization has been facilitating gifts of cryptocurrency from donors for a number of years now. They make it very easy and affordable. They offer different options for nonprofits to choose from and have recently expanded their services to accepting stock and some other non-cash assets. I’ve spoken to nonprofits who use this service and they like it because GivingBlock is able to sell the crypto faster than they can. The volatile nature of cryptocurrency means that the value fluctuates greatly over short periods of time. When you accept a gift of crypto, you want to be able to sell it almost immediately to avoid a sharp drop in the trading price.
Charitable Solutions, LLC: This organization offers more services than I can list here. One of the many things they do is to facilitate non-cash gifts of virtually any type. This service operates much like the “pass through” option I described above. They accept the gift, liquidate the asset, and pass the sales proceeds along to your organization minus a small fee to cover their costs.
Insuring A Better World Fund: This organization specializes in gifts of life insurance. They accept the insurance policy directly from the donor, pay ongoing premiums, and at the death of the insured, pass the death proceeds onto the donor’s favorite charities.
Realty Gift Fund: This organization specializes in gifts of real estate. They perform all the necessary due diligence, work directly with the donor, accept the property, market it, and pass the sales proceeds along to the donor’s favorite charities. They retain a small % of the proceeds to cover their costs.
This article is not an exhaustive list of partners that can help you, but it’s a good start. You don’t need to re-create the wheel and try to handle all complex gifts on your own. Get to know these providers and partner up with the one(s) that feel like a good fit. Establish a relationships with them now and don’t wait until a donor comes to you with a proposed gift. Get your ducks in a row now. Start marketing non-cash gifts and impress your donors with your ability to accept not just cash and checks – but their other assets as well.
Neither HOLT Consulting, nor Dana Holt is affiliated with any of these companies and does not receive any compensation for sharing information about their services.
Continue Your Learning
I’ve created some resources to help you build your confidence around non-cash gifts and to help you navigate the nuances and rules around various asset types.
Turning Wealth Into What Matters: This step-by-step guide walks you through exactly how to accept each type of non-cash asset. It also includes internal procedures, asset questionnaires, and other documents you can start using right away. It includes everything I teach when speaking and all the materials I’ve created for clients over the years in one easy to use book.
Online School for Non-Cash Gifts: This online, on-demand school includes educational modules on all asset types. It will de-mystify non-cash gifts, help you have more confident conversations about non-cash gifts, and spot more opportunities for non-cash gifts.
Each module includes a video, curated articles, a quiz, and CFRE credit. You can purchase the entire course, or just the individual modules you want. It is intentionally priced to be affordable to nonprofits of any size and budget.
So, get out there and make some friends. Start or expand your non-cash giving program with the help of these partners and resources. You want to help your donors give from their assets – not just their cash reserves. With a little help from your friends, you can make those gifts a reality!
And now the song…..
I know the song is in your head, so here’s something for your listening enjoyment….