How to accept stock donations as a nonprofit — Guide

How to accept stock donations as a nonprofit

How to accept stock donations as a nonprofit is a common and highly valuable question for fundraisers and finance teams. This guide explains what stock donations are, why they matter, the legal and tax framework in the U.S., operational flows (brokerage/DTC vs. intermediaries), donor instructions, recordkeeping, and practical templates so your organization can receive and steward gifts reliably.

As of 2026-01-15, according to fundraising sector reporting, more nonprofits are offering stock giving options to diversify revenue and attract major donors. This article synthesizes IRS guidance (including Publication 561 and related guidance), nonprofit best practices, and leading service models to give you a complete operational playbook.

Note: this guide is educational—not tax or legal advice. Encourage donors and your organization to consult qualified tax and legal counsel before completing any transfer.

Why accept stock donations

Accepting stock donations can materially boost fundraising and donor engagement. Donors with appreciated publicly traded securities often prefer to donate shares because they can generally avoid capital gains on the appreciation and may receive a charitable deduction for the fair market value (subject to IRS rules). For nonprofits, accepting stock gifts often leads to larger average gift sizes, stronger major‑donor relationships, and the ability to convert noncash wealth into programmatic funding or long‑term investments.

Benefits at a glance:

• Larger gift potential: Stock gifts are commonly used by major donors and planned giving donors.
• Donor tax advantages: Donors may avoid capital gains and may deduct the FMV of donated publicly traded securities if they meet IRS substantiation rules.
• Diversified funding: Securities expand fundraising beyond cash appeals, especially during year‑end and capital campaigns.
• Stewardship opportunities: Major gifts of stock open doors to deeper engagement and legacy conversations.

Key tradeoffs nonprofits consider: timing of liquidation, liquidity and concentration risks, compliance and documentation needs, and potential fees when using intermediaries.

Types of securities and special considerations

Nonprofits should be clear about which securities they accept and what special processing each requires.

Publicly traded securities

Publicly traded stocks (domestic and many foreign listings) are the simplest securities to accept. They have transparent market prices, commonly transfer broker‑to‑broker via the DTC system, and are generally easy to liquidate.

Operational notes:

• Fair market value (FMV) is typically the average of the high and low on the date of donation for stocks traded on an established market, or the closing price in many practical nonprofit accounting workflows.
• Donors commonly instruct their broker to electronically transfer shares to the nonprofit’s brokerage account using DTC routing and the receiving account number.
• For publicly traded securities, donors often qualify for a charitable income tax deduction equal to the FMV if the donor held the stock more than one year, subject to IRS limits.

Mutual funds and ETFs

Mutual funds and ETFs may be transferred in kind. Some mutual funds have transfer agents requiring different transfer mechanics than brokered equities; ETFs typically behave more like stocks when held at a broker.

Considerations:

• Confirm with the fund company or receiving broker whether an in‑kind transfer is supported and whether there are restrictions or fees.
• Valuation is usually based on the fund’s NAV on the date of transfer; check whether the fund redeems at NAV that same day or requires processing.

Privately held securities and illiquid assets

Privately held shares, restricted stock, partnership interests, and other illiquid securities create substantially more complexity.

Key points:

• Independent valuation often required (qualified appraisal) and IRS rules may limit donor deduction if proper substantiation is missing.
• Transferability can be contractually limited by shareholder agreements or securities law considerations.
• Many nonprofits decline private securities or accept them only with board approval, escrow arrangements, or specific terms to protect the organization.

Restricted stock, options, and derivatives

Options, warrants, convertible instruments, and restricted stock units (RSUs) typically present transferability or tax timing issues.

Practical guidance:

• Nonprofits commonly do not accept options or derivatives directly because they are not immediately marketable and may create complex tax and administrative burdens.
• Restricted stock that is fully vested and transferable can be accepted, but restricted or unvested awards usually require special counsel review.

Legal and tax framework

Understanding donor tax benefits, nonprofit substantiation obligations, and fiduciary responsibilities is essential.

Donor tax benefits and IRS rules

Donors who give appreciated publicly traded securities generally avoid paying capital gains tax on the appreciation (because they are not selling) and may claim a charitable deduction for the fair market value of the gift if they held the asset for more than one year.

Important IRS considerations:

• Holding period: Long‑term vs. short‑term holding period affects deduction amount.
• Cost basis: Donors should know their basis and consult tax advisors; nonprofits should not give tax advice but can provide referral language.
• Appraisals: For gifts of nonpublicly traded securities or for certain gifts over specified amounts, an independent qualified appraisal and IRS Form 8283 may be required.

Reference documents: IRS Publication 561 (Determining the Value of Donated Property) and IRS Publication 526 (Charitable Contributions) provide rules for valuation and substantiation.

Donee (nonprofit) tax responsibilities and substantiation

Nonprofits must provide contemporaneous written acknowledgments for noncash gifts as required by IRS rules. For securities gifts, the acknowledgment typically includes the date, description of donated property, and a statement confirming whether any goods or services were provided in return.

When appraisals are required:

• Donors claim deductions and must follow Form 8283 rules; for certain appraised gifts over thresholds, the nonprofit may need to sign parts of Form 8283.
• If a nonprofit sells a contributed property within three years for less than the claimed amount, the nonprofit may have responsibilities under Form 8282.

State law and fiduciary considerations

State laws and charitable trust rules can affect acceptance and disposition. Boards have fiduciary duties to act in the charity’s best interest; accepting large or illiquid securities may require board review and written acceptance policies.

Recommendations:

• Maintain written acceptance policies and an Investment Policy Statement (IPS) that address securities gifts.
• Involve counsel for complex or restricted gifts.

Methods to accept stock donations

There are four common models nonprofits use: hold a direct brokerage account; use intermediaries or DAFs; use third‑party processors; and accept direct broker transfers following DTC instructions.

Opening a nonprofit brokerage account (direct receipt)

Steps to open an account:

1. Choose a broker that supports nonprofit accounts (custody, DTC transfers, check liquidation timelines). For digital wallets or web3-related holdings, use a secure wallet such as Bitget Wallet where appropriate for crypto—however, for U.S. securities you will use a traditional broker account.
2. Gather documentation: 501(c)(3) determination letter, EIN, articles of incorporation, board resolution designating authorized signers, and a W‑9 if required.
3. Complete account forms naming the nonprofit as account owner, establish authorized signers, and provide transfer instructions.

Pros:

• Full control over timing of liquidation and investment decisions.
• No intermediary fees besides brokerage costs.

Cons:

• Requires setup time, knowledgeable staff to manage securities, and internal controls to manage authorization and sale decisions.

Using an intermediary or donor‑advised fund (DAF)

Intermediaries and DAFs accept transfers on behalf of nonprofits and either grant proceeds to the charity or allow donor direction. Advantages for smaller nonprofits include no need to open a brokerage account and a simplified donor experience.

Tradeoffs:

• Intermediaries often charge fees or apply administrative spreads and may take time to disburse.
• The nonprofit may not receive donor information beyond the grantor’s instructions unless donor chooses to disclose.

Examples of intermediary benefits:

• Simple donation flow for donors.
• Consolidated reporting and quicker donor receipts.

Third‑party stock donation processors/platforms

Platforms that specialize in stock donations offer white‑label pages, transfer instructions, liquidation, donor receipts, and CRM integrations. They can be helpful for nonprofits that want a seamless online donor experience without full in‑house brokerage operations.

Operational notes:

• Fee models vary: percentage fees, fixed fees, or per‑transaction charges.
• Evaluate integrations with your CRM and accounting systems and whether the platform issues IRS‑compliant acknowledgments.

When to use platforms:

• If your organization lacks brokerage capacity and prefers an integrated donor experience.
• To streamline year‑end appeals and major gift solicitation processes.

Direct broker transfer instructions (DTC method)

Most electronic transfers of publicly traded securities use the Depository Trust Company (DTC) system to move shares from the donor’s brokerage to the nonprofit’s brokerage.

Common required fields donors need to provide their broker:

• Receiving broker name and DTC number (your receiving broker provides this).
• Receiving account name exactly as opened (e.g., legal nonprofit name).
• Receiving account number.
• Contact person at receiving broker (for settlement questions).

Why precise instructions matter:

• Incorrect account names or numbers can delay transfers or cause a failed transfer.
• Provide donors with a prefilled form and the receiving broker’s transfer contact information to reduce friction.

Operational steps and checklist for nonprofits

A reliable internal process helps avoid errors and ensures correct accounting and stewardship.

Governance & policies

• Adopt an Investment Policy Statement (IPS) addressing acceptance, liquidation timelines, concentration limits, and conflicts.
• Board approval: require board signoff for qualified types of gifts (e.g., privately held securities) or gifts above a dollar threshold.
• Designated signers: maintain a current list of authorized signatories and contact information with your broker.

Documentation to collect and store

Collect and store:

• 501(c)(3) determination letter, EIN, articles of incorporation.
• Donor transfer confirmations, broker memos, and trade/settlement confirmations.
• Gift acknowledgment letters that meet IRS substantiation rules.
• Records related to valuation, appraisals, and board approvals for nonstandard gifts.

Treasury and cash flow handling

Decide whether to liquidate immediately or hold donated securities:

• Immediate liquidation converts gifts into operating or reserve cash, reducing market risk.
• Holding securities may be appropriate if the gift aligns with an investment strategy, but it increases market and concentration risks.

Document the decision in writing and follow the IPS.

Fees, settlement times, and reconciliation

• Settlement timelines depend on the security and broker: domestic equities typically settle within a few business days; mutual funds may take longer.
• Platforms and brokers may charge transaction fees; account for these when reconciling net proceeds.
• Reconcile gift date, FMV on date of transfer, broker confirmations, and net cash deposit in accounting and CRM systems.

Donor‑facing materials and how to solicit gifts of stock

Make the donation process as frictionless and informative as possible for donors.

Website widgets, donation pages, and transfer forms

• Provide a dedicated stock‑giving page with clear instructions, a downloadable transfer form, and a named broker contact for the nonprofit.
• Consider embedded donation widgets from reputable processors to capture donor intent and contact details.
• Pre‑fill transfer templates with your nonprofit’s legal account name, DTC number, receiving account number, and settlement contact.

When you collect donor info, ask for:

• Donor name, email, phone, broker name, ticker symbol, number of shares, and expected transfer date.

Messaging and tax literacy for donors

Communicate benefits clearly and responsibly:

• Explain that donors may avoid capital gains and could claim a deduction for FMV (if long‑term held), but advise donors to consult a tax advisor.
• Use simple examples to show how donating appreciated stock can be more tax‑efficient than selling and donating cash.

Sample messaging note: “Donors often avoid capital gains on appreciated stock and may receive a tax deduction for the fair market value when rules are met—please consult your tax advisor.”

Campaign integration and stewardship

• Promote stock giving in major‑donor asks, planned giving materials, and year‑end appeals.
• Steward donors of securities with personalized acknowledgments, impact reports, and recognition aligned with donor preferences.

Recordkeeping, reporting, and donor acknowledgement

Accurate documentation protects donors and the charity.

Tax receipts and acknowledgment letters

A contemporaneous written acknowledgment should include:

• Donor name and address.
• Date of the contribution.
• Description of the property (e.g., number of shares and ticker) but not the FMV if the nonprofit is not qualified to determine it.
• Statement that no goods or services were provided by the organization in return for the gift, or a good faith estimate if something was provided.

Note: For publicly traded securities, nonprofits typically acknowledge receipt and the donor claims FMV; nonprofits should avoid stating a dollar FMV unless they are certain of the valuation method and legal responsibilities.

Noncash gift reporting and IRS forms

• Donors may file Form 8283 for noncash contributions; the nonprofit may be asked to sign parts of Form 8283 in appraisal cases.
• If the nonprofit disposes of contributed property within three years for less than claimed value, the nonprofit may need to file Form 8282.
• Refer to IRS Publication 561 for valuation methodologies and thresholds.

CRM and accounting integration

• Track security gifts in your CRM with fields for security type, ticker, shares, transfer date, FMV on date of transfer, broker confirmations, and net proceeds.
• Accounting should record the FMV on the date of receipt as contribution revenue and record any transaction fees and net cash receipts appropriately.

Risk management and compliance

Identify and mitigate fraud, liquidity, concentration, and ethical risks.

Fraud prevention and verification

• Confirm donor intent via email or phone before liquidating, particularly for large or unusual transfers.
• Verify broker memos and settlement confirmations against donor notifications.
• Protect donor account information and PII in compliance with your privacy policy.

Liquidity and concentration risks

• A single large gift of concentrated stock can create portfolio concentration; implement IPS rules limiting exposure to single issuers.
• Consider staged liquidation plans for very large gifts to manage market impact and programmatic needs.

Conflicts of interest and ethics

• Require disclosure and additional oversight for gifts from board members or closely related parties.
• Decline gifts that could create reputational risk or donor conditions inconsistent with the nonprofit’s mission.

Practical examples and common scenarios

Small nonprofit with no brokerage account (use of intermediaries)

Scenario: A donor wants to give appreciated shares but the nonprofit has no brokerage account. The donor uses an intermediary that accepts the transfer, liquidates, and issues a grant to the nonprofit.

Flow:

• Donor initiates broker transfer to intermediary.
• Intermediary liquidates shares and issues a grant to the nonprofit (net of fees).
• Nonprofit receives cash and an acknowledgement letter; donor receives documentation for tax purposes.

This model removes brokerage overhead but may involve platform fees and less donor identity unless the donor discloses.

Medium/large nonprofit with own brokerage account

Scenario: Donor transfers 1,000 shares of a publicly traded stock DTC to the nonprofit’s brokerage account.

Flow:

• Donor notifies the nonprofit and provides broker and transfer details.
• Receiving broker confirms settlement; nonprofit issues an acknowledgment letter indicating the date and description.
• Nonprofit follows IPS—either sells immediately or holds according to investment policy—and records FMV on the receipt date as contribution revenue.

Gift of privately held shares or complex securities

Scenario: Donor offers 10% of a privately held company via stock certificates.

Flow and considerations:

• Require board approval and an independent appraisal.
• Assess transferability, securities law implications, and potential liability.
• Decide to accept, decline, or accept subject to conditions (escrow, sale rights).

Often these gifts involve extended timelines and professional fees.

Comparison of third‑party service models

When evaluating providers, compare on:

• Fee structure: percentage of gift vs. fixed fee.
• Turnaround time for liquidation and disbursement.
• Whether the provider holds brokerage accounts or simply facilitates transfer.
• White‑label and CRM integration capabilities.
• Transparency about net proceeds to the nonprofit.

Choose a model that balances donor convenience with cost and control needs for your organization.

Frequently asked questions (FAQ)

Q: How is gift value determined?

A: For publicly traded securities, FMV is generally the market price on the date of donation (many organizations use the average of high and low or the closing price); for nonpublic gifts, independent appraisals may be required.

Q: Who signs for the transfer?

A: Authorized signers on the nonprofit’s brokerage account finalize acceptance and may need to sign forms; maintain an up‑to‑date list of authorized signers.

Q: What documentation does the donor need?

A: Donors typically need the nonprofit’s account name, receiving broker DTC number, account number, and a contact name/email; a prefilled transfer form minimizes errors.

Q: Can donors get a deduction for highly appreciated stock?

A: Donors who held the stock more than one year generally may claim a deduction for FMV, subject to IRS limits; always recommend the donor consult a tax advisor.

Q: When does the nonprofit report sale proceeds?

A: Nonprofits record contribution revenue at FMV on the date of receipt of the securities. Net cash proceeds post‑sale reflect realized amounts after fees and any market movement between receipt and sale.

Resources and further reading

Key authoritative resources to consult when designing your policy and procedures:

• IRS Publication 561 (Determining the Value of Donated Property) and Publication 526 (Charitable Contributions).
• Platform and processor documentation from reputable stock gift processors and intermediaries.
• Professional advisors: tax counsel, securities counsel, and investment advisors.

Sample templates and transfer checklist (appendix)

Below are concise templates to adapt for your website, donor forms, and internal checklists. Customize legal names and account details to match your organization.

Donor transfer instruction template (example copy for website)

Please include the following information when instructing your broker to transfer shares to us:

• Receiving broker name: [Your broker name]
• DTC number: [Your broker DTC]
• Account name: [Legal nonprofit name exactly as registered]
• Account number: [Receiving account number]
• Contact for settlement confirmation: [Name, email, phone]

Notify us of the intended gift in advance with ticker, number of shares, donor name, and expected transfer date so we can match the transfer and issue a timely acknowledgement.

Nonprofit acceptance and reconciliation checklist

• Confirm transfer receipt with broker trade confirmation.
• Record FMV on date of receipt and log in CRM and accounting.
• Issue gift acknowledgment to donor within IRS timeframes.
• Reconcile net proceeds upon sale and record fees.
• File or retain necessary appraisal documents and board approvals for complex gifts.

Final notes and next steps

Accepting stock donations is a powerful way to expand your nonprofit’s fundraising toolkit, attract major donors, and convert appreciated assets into mission funding. Start by deciding whether to open a brokerage account or use an intermediary, draft clear donor instructions, adopt acceptance policies, and ensure your finance and development teams coordinate closely.

If you want to streamline donor crypto and wallet‑based giving for Web3 assets, consider recommending secure wallet solutions like Bitget Wallet to donors who hold digital assets—but for U.S. securities, follow the brokerage/DTC flows described above. For hands‑on help, evaluate third‑party processors or platform partners that can provide white‑label donation pages, transfer processing, and IRS‑compliant acknowledgments.

Further resources and professional advice can help you implement a secure and donor‑friendly stock donation program. Explore practical next steps: create a stock‑gift page, prepare a prefilled transfer form, and update your IPS to include stock gifts.

Ready to accept your first stock gift? Begin by assembling the documents below and reaching out to your chosen broker or platform partner.

Note: This guide summarizes general practices as of 2026-01-15 and references public IRS guidance. It does not constitute legal or tax advice.