How to Accept Stock Donations, and Why Most Charities Cannot Yet

To accept stock donations, a nonprofit needs a brokerage account in its own name, or an intermediary that receives the shares for it. It gives donors the transfer instructions, records each gift at the average of that day’s high and low price, sends a receipt that describes the shares without valuing them, and sells or holds them under a written policy. The setup takes a few weeks once, and each gift after that is routine.

Most charities have never done it. Across 256,539 charities filing a full Form 990, 182,032 (71.0%) show no securities anywhere on their return: none held at year end and none sold during the year. Under $250,000 of spending that rises to 78.4%. The figures below are from the IRS annual extract of those returns, and the analysis script is published with the method.

Why donors give stock instead of cash

The reason is tax, and it only works for shares that have gone up. A donor who has held a stock for more than a year and gives it to a public charity deducts its full market value and never pays capital gains tax on the growth. Selling it first and giving the cash would cost them that tax. For a share bought at $2,000 and now worth $10,000, the gift of stock is worth the same $10,000 to the charity and saves the donor tax on an $8,000 gain.

Three limits shape what a fundraiser should suggest:

• Held a year or less: the deduction is limited to what the donor paid, so the advantage disappears.
• Shares that have fallen: the donor should sell, claim the loss, and give the cash. Giving the shares wastes the loss.
• The ceiling: gifts of appreciated stock to a public charity are deductible up to 30% of adjusted gross income in a year, with five years to carry forward any excess.

The rules changing on 1 January 2026 tilt this further toward larger donors. The new deduction for people who do not itemize, up to $1,000 or $2,000 for a couple, applies to cash gifts only, so it does nothing for a stock gift. Itemizers face a floor of 0.5% of income before gifts count, and in the top bracket the value of the deduction is capped at 35%. Stock gifts remain a tool for the donors who itemize, and those are the donors most likely to hold appreciated shares. The sector statistics cover the changes in full.

How many charities are set up to receive it

Overall, 17.1% of charities sold securities during the year and 25.4% held publicly traded securities at the end of it. Only 29.0% did either. The share rises with size, but even among charities spending $5m to $25m, half show no securities at all, and among the largest a third do not.

This is a footprint, not a census of brokerage accounts, and the obvious objection is that it misses charities with an account that happened to be empty. It does, in both directions. A charity that opened an account, received nothing and sold nothing shows up here as having none, so the 71.0% overstates the charities without the plumbing. A charity whose securities sales are from its own investment portfolio rather than donated shares shows up as having some, so the 29.0% overstates the charities that take stock gifts. What the figure does establish is the ordinary case: for most charities, the first stock gift is also the first time anyone has had to work out how to receive one. That is worth doing before a donor asks, because the donor usually asks in December.

How to set it up, step by step

1. Decide the policy first. The board should agree what the organization will accept and what happens next. The usual answer is: publicly traded stock and mutual funds accepted, sold on receipt, with the treasurer and one other officer authorised to act. Closely held stock, restricted shares, real estate and cryptocurrency should go to review case by case, because each can carry costs or obligations the gift does not cover. Cryptocurrency catches donors out: it is property, and above $5,000 the donor needs a qualified appraisal to claim the deduction. This belongs in the gift acceptance section of the organization’s core policies.

2. Open a brokerage account in the charity’s name. Most large brokers open nonprofit accounts, usually asking for the IRS determination letter, the EIN, articles of incorporation, and a board resolution naming who may sign. Choose one that can sell on receipt without a commission or with a small one, and ask how long a sale takes to settle into the operating bank account.

3. Publish the transfer instructions. A donor’s broker needs the receiving broker’s name and DTC number, the charity’s account number, its legal name and its EIN. Put them on a page of the website and in the year end appeal, with a named contact. Mutual fund shares often move between fund companies rather than through the DTC system and can take several weeks, so a December donor holding funds should start early.

4. Ask every donor to tell you. Shares transferred through the DTC system typically arrive with little or nothing to say who sent them. A short form or an email address for stock donors, asking for their name, the security, the number of shares and the date of transfer, is the difference between a thank you letter and an unidentified deposit that someone reconciles in March.

5. Value the gift the way the IRS does. The value of a publicly traded share is the average of its highest and lowest selling prices on the date of the gift. For an electronic transfer through a broker, the date is when the shares are transferred into the charity’s name, not when the donor gave the instruction. A transfer started on 29 December can land in January, and in the next tax year. Record the contribution at that value, and any later difference between that figure and the sale proceeds as an investment gain or loss.

6. Acknowledge it correctly. For any gift of $250 or more the donor needs a written acknowledgment to claim the deduction. For stock it should name the donor, describe the gift (for example, 100 shares of a named company), give the date received, and state whether the donor received anything in return. It does not need to state a value, and the IRS guidance is that it should describe the property rather than value it. Leave the figure out: valuation is the donor’s responsibility, and their adviser can compute the high and low average from the date in a minute. The acknowledgment wording, including the version for non-cash gifts, is in the donation letter templates.

7. Sell or hold, as the policy says. Most small charities sell immediately, which removes market risk and turns the gift into cash the budget can use. Holding shares turns the organization into an investor, which needs an investment policy and someone to watch it. A charity with thin reserves should rarely hold, and the cash reserve benchmarks show how many have little margin to absorb a fall.

The intermediary route

A charity that does not want its own account can use a stock donation service. Every.org, DonateStock and FreeWill all offer versions of it: the donor transfers shares to the service or its broker, it sells them, and the charity receives cash. The trade offs are the same across providers and worth checking before signing up:

• Who receipts the gift. Some services act as the legal recipient, the way a donor advised fund does, and issue the tax receipt themselves. The charity then receives a grant, not a stock gift, and should not issue a second receipt.
• What the charity learns. Check whether the donor’s name and contact details come through with the money, or whether the donor has to opt in.
• Fees and timing. Pricing ranges from free to the charity to a percentage of each gift, and the cash can take days or weeks to arrive.

Donor advised funds are the other intermediary. A donor who gives stock to their own fund takes the deduction then and recommends a cash grant later, so the charity receives cash and needs no account at all. For many small charities, the practical stock policy is to accept direct transfers from the few donors who insist, and to point everyone else to their fund.

Non-cash gifts more widely

Stock is one kind of non-cash gift. The return also asks whether the organization received more than $25,000 of non-cash contributions in the year, which requires Schedule M, and whether it received art, historical treasures or conservation easements.

29,737 charities (11.6%) received more than $25,000 of non-cash gifts, rising from 3.0% under $250,000 to 36.3% over $25m. 44.6% of them show no securities at all, so for those organizations the gifts were almost certainly goods, not shares: donated food, clothing, medical supplies, equipment, vehicles and services in kind. That is why the share without securities is highest among small charities, where food pantries and thrift operations sit. Non-cash giving follows donations rather than size alone: it is 2.9% among charities that get less than 10% of revenue from contributions, and 15.7% among those that get 50% to 90%.

Recording goods is different from recording stock. Donated goods are contributions at fair value, and services in kind count only when they create or improve an asset or need specialised skills the charity would otherwise buy. Keep them in their own accounts, separate from cash, as the chart of accounts template sets out, and the practical guidance on when to decline an in-kind gift is in the guide to getting donations.

The paperwork that comes with other property

Publicly traded stock is the easy case because its price is public. For other property the rules add paperwork, some of it the charity’s:

• Form 8283. A donor claiming more than $500 of non-cash gifts files it. For an item or group of similar items over $5,000, other than listed securities, the donor needs a qualified appraisal and may ask the charity to sign Section B. Signing acknowledges receipt, not the value.
• Form 8282. If the charity sells or disposes of Section B property within three years, it files Form 8282 with the IRS and sends the donor a copy. Only 404 charities (0.16%) reported filing one, rising to 1.50% of those over $25m. Listed stock never triggers it, because it goes on Section A.
• Form 1098-C. A charity that receives a car, boat or plane worth more than $500 must report it to the donor and the IRS. 1,409 charities confirmed they had filed as required. The extract codes an unanswered question as No, so the number that received vehicles and did not file cannot be separated out.
• Art and conservation easements were reported by 0.77% of charities, and come with the strictest valuation rules and the most IRS attention of any gift type.

All of it is reported on Schedule M, and the Form 990 guide covers which schedules apply.

Where stock gifts go wrong

The mechanics rarely fail once they are set up. What fails is the record of the relationship. A stock gift is usually arranged by email between the donor, their financial adviser and someone at the charity, and the details that matter later live in that thread: which shares, what the donor wanted them to fund, and whether this is the first of several gifts timed to their tax year. Stock donors tend to be among a charity’s larger donors, because the advantage only matters to people who itemize and hold appreciated shares, and many are also its likeliest planned giving prospects, so losing that context when a fundraiser leaves is expensive.

For a development team handling many such relationships, Gratefully builds that context from the CRM, documents and email and produces handover notes when a relationship changes hands, at $4,788 a year for five seats, with a free plan for one person. It is the wrong purchase for a charity that receives one or two stock gifts a year, where a note in the donor record does the job, and it does not process the transfer: that still needs the brokerage account or intermediary described above.

Receipts when the donor gets something back

A related rule catches more charities than stock does. When a donor pays more than $75 and receives goods or services in return, such as a gala ticket that includes dinner, the charity must give a written statement of the value of what was received and the deductible balance. 22,632 charities (8.8%) reported receiving these quid pro quo payments. Of those, 630 (2.8%) answered No, or left blank, the question asking whether they told donors. The rate falls with size, from 5.9% under $250,000 to 0.9% over $25m, which is the usual pattern for a rule that larger organizations have someone to track. The penalty is $10 per contribution, up to $5,000 per event or mailing, and the required wording is in the donation letter templates.

Method and limits

The data is the IRS SOI annual extract for processing year 2024, restricted to 501(c)(3) organizations with at least $25,000 of total expenses, which gives 256,539 returns. Securities sold are Part VIII line 7a column (i), gross sales of securities; securities held are Part X line 11, publicly traded securities at year end. Non-cash gifts, art and conservation are Part IV lines 29 and 30; quid pro quo payments and disclosure are Part V lines 7a and 7b; Forms 8282 and 1098-C are Part V lines 7c and 7h.

Four limits. Organizations filing Form 990-EZ or 990-N are absent. Schedule M, which splits non-cash gifts into securities, vehicles, food and other types, is not in the extract, so the number of charities that received stock specifically is not measurable; securities activity stands in for the capacity to receive it. The extract records an unanswered Yes or No question as No, which matters for the disclosure and vehicle questions and is stated where it applies. And nothing here is tax advice; a donor should confirm the deduction with their own adviser.

Questions people ask

How does a nonprofit accept stock donations?

Open a brokerage account in the charity's name, or use a stock donation service, and give donors the broker's DTC number, the account number and the EIN. Record each gift at the average of the high and low price on the day it arrives, acknowledge it without stating a value, and sell or hold it under a written policy.

Does a nonprofit need a brokerage account to accept stock?

Not necessarily. A stock donation service can receive and sell the shares and pass on the cash, and a donor can give stock to their donor advised fund and recommend a cash grant. 71.0% of charities filing a full Form 990 show no securities at all on their return.

What is a DTC number?

It identifies the receiving broker in the Depository Trust Company system, through which most electronic share transfers move. A donor's broker needs it, together with the charity's account number, legal name and EIN, to send the shares.

How do you value donated stock?

For publicly traded shares, the value is the average of the highest and lowest selling prices on the date of the gift, which for an electronic transfer is the date the shares move into the charity's name. The charity records the gift at that value.

Should the receipt for donated stock state its value?

It does not have to. The acknowledgment should name the donor, describe the shares and their number, give the date received, and say whether anything was given in return. Valuing the gift is the donor's responsibility, so the charity should describe the gift and leave the figure out.

Should a nonprofit sell donated stock immediately?

Most small charities do, because it removes market risk and turns the gift into usable cash. Holding shares needs an investment policy and someone to oversee it. Whatever the choice, the board should put it in the gift acceptance policy before the first gift arrives.

Is it better to donate stock than cash?

For shares held more than a year that have gone up in value, usually yes: the donor deducts the full market value and pays no capital gains tax. For shares held a year or less, or that have fallen, it is better to sell and give cash.

Where do these figures come from?

The IRS Statistics of Income annual extract of Form 990 returns, processing year 2024, covering 256,539 charities with at least $25,000 of spending. It is a free public download, and the analysis script is published alongside the method.

This is reference information, not legal or tax advice. Rules vary by state and change over time. For a decision that carries real consequences, check the current text at irs.gov or your state registry, and talk to a nonprofit attorney or CPA.