Key Takeaways:
- To accept stock donations, a nonprofit needs an investment account that can receive transferred shares, either in its own name or through a giving service, along with written transfer instructions that donors can pass to their brokerage firm.
- A written policy that says whether donated shares are sold on arrival or reviewed first, and who decides, keeps each gift consistent with the organization’s Investment Policy Statement.
- Stock, donor-advised fund grants, and qualified charitable distributions (QCDs) each arrive differently, so each needs its own steps for identifying the donor and sending the right acknowledgment.
- Donor-advised funds granted about $65 billion to charities in fiscal year 2024, according to the Annual DAF Report 2025 from the Donor Advised Fund Research Collaborative, which makes a process for identifying and thanking donors who give through a DAF part of being prepared.
- Development staff who understand the main giving options, and who ask whether the donor’s financial advisor, CPA, or estate attorney should join the conversation, can help a larger gift move forward.
Educational / General Disclaimer: This article is for informational and educational purposes only and does not constitute investment, legal, or tax advice. Raffa Investment Advisers is a registered investment advisor. Each organization’s financial situation is unique. Please consult with a qualified investment professional before making financial decisions, and with your CPA or legal counsel on tax and legal questions.
A longtime donor calls to say she would like to give shares of stock this year instead of writing a check. Accepting that gift requires an account that can receive the shares, instructions the donor’s broker can follow, and a decision about what happens to the shares once they arrive. Grants from donor-advised funds and distributions from a donor’s IRA raise similar questions, and the more prepared an organization is to answer them, the better the experience for the donor.
This article covers how to accept stock donations as a nonprofit, how other common non-cash gifts work, and how development and finance staff can help donors choose how to give. It is written for charitable nonprofits, with a note for associations in the FAQ.
How Can a Nonprofit Accept Stock Donations?
A nonprofit can accept stock donations by holding an investment account in its own name that can receive transferred shares, giving donors transfer instructions, acknowledging each gift in writing, and following a written policy on whether to sell or hold the shares. The process generally includes these steps:
- Open or confirm a receiving account at a brokerage firm or custodian. Before receiving a gift of stock, your organization needs an account at a brokerage firm or custodian (the financial institution that holds and safeguards the organization’s investments) that is able to accept transferred securities, titled in the organization’s legal name and under its tax ID. If the organization already has an investment account, the brokerage firm or custodian that holds it, or your investment advisor, can confirm whether it accepts incoming securities transfers.
- Write transfer instructions in advance. Prepare a short transfer instruction sheet that staff can send whenever a donor asks. This instruction sheet typically includes the organization’s legal name and tax ID, the name of the brokerage firm or custodian that holds the account, the DTC number for that brokerage firm or custodian (its participant number at the Depository Trust Company, which brokers use to route electronic transfers), the account name and number, general instructions, and a staff contact for questions. A donor’s broker generally needs these details to set up the transfer. Your brokerage firm may be able to assist in preparing these instructions.
While some organizations may post the instructions on their website so donors can give without waiting, others share them only on request, keeping account details better contained and helping staff maintain greater awareness over when gifts will be arriving. At Raffa, we do not recommend posting account details online due to the risk of sensitive information falling into the wrong hands. - Request notice of the transfer and confirm receipt. Ask each donor to let you know when a transfer is initiated, along with the company name and number of shares. This matters most when instructions are published, since donors may send shares without contacting the organization first and the account statement may not show who sent them. When the shares arrive, confirm receipt with the donor so the gift is matched, recorded, and acknowledged correctly.
- Acknowledge the gift in writing. For gifts of $250 or more, the donor needs a written acknowledgment that describes a non-cash gift, such as the number of shares and the company, and states whether the organization provided any goods or services in return. Because the donor needs this acknowledgment to substantiate a deduction for a gift of that size, sending it out quickly is important. Your organization’s CPA can review the acknowledgment template to confirm the wording, particularly for gifts where the donor receives something in return.
- Follow your policy on selling or holding donated shares. This direction can be written into a gift acceptance policy, the organization’s Investment Policy Statement, or a short stock donation policy approved by the board or finance committee. Whichever document holds it should say whether shares are sold on arrival or reviewed first, who makes the decision, and where the proceeds go. If your organization works with an investment advisor, the advisor can help draft this language so it fits the Investment Policy Statement and can carry out sales under it.
Does a Nonprofit Need a Brokerage Account to Accept Stock?
A nonprofit needs a brokerage account to accept stock, either one opened in its own name or one provided through a third-party giving service, because shares cannot be deposited into a bank checking or savings account. The account can sit at the custodian that already holds the organization’s reserves, it can be a separate account opened only to receive gifts, or it can be provided by a giving service that receives and sells shares for the organization.
Opening an account for an organization generally requires the organization’s formation documents and names the individuals authorized to act on the account, which a board can approve by resolution. The person who can sign for a cash withdrawal is not always the person who should decide whether to sell 500 shares of a single company.
Should a Nonprofit Sell or Hold Donated Stock?
A nonprofit can sell donated stock on receipt, which turns the gift into cash and avoids adding a single company’s shares to the portfolio, or hold it for review, which gives the organization time to weigh larger gifts or gifts that come with donor requests. Whichever approach the organization chooses, it should be set in policy before the first gift arrives, with someone named to carry it out.
Four considerations shape the policy:
- Concentration: A gift of one company’s stock adds a holding the investment policy did not plan for. Diversification limits in an Investment Policy Statement guard against that kind of concentration. Our guidance on what a strong investment policy includes actually lists a major gift as a trigger for reviewing the policy outside the normal cycle.
- Price movement: Until the shares are sold, their value moves with the market. A policy that sets how quickly shares are sold, or names who decides if they are not sold right away, limits the time a gift sits without a decision.
- Authority: Name who can approve a sale, whether staff acting within policy, the treasurer, or the finance committee for gifts above a set size. Your investment advisor can generally help you evaluate various strategies and implement your plan of action in line with your IPS.
- Donor wishes: A donor who asks the organization to hold the shares is asking for something that may conflict with the investment policy. Any agreement to hold should be documented in the gift paperwork, with the organization carefully considering the request.
Where Should a Stock Gift Go Once It Arrives?
Two documents decide where a stock gift goes once it arrives: the gift agreement and the reserve policy. The gift agreement, or the donor’s written instructions, comes first. When a donor restricts a gift to a program or asks that it be held for the long term, the proceeds follow those terms.
When a gift is unrestricted and is not needed for the current year’s budget, the reserve policy takes over. If the policy sets a target for each reserve, it can direct the proceeds to replenish any reserve that has fallen below its target before the remainder moves to strategic or long-term reserves. Our article on dividing reserves by purpose and time horizon explains how those targets are set.
Two documents decide where a stock gift goes once it arrives: the gift agreement and the reserve policy.
Download our sample reserve policy for a template you can adapt to your organization’s
objectives and financial situation.
Types of Nonprofit Donations Beyond Cash and Stock
Other types of nonprofit donations beyond cash and publicly traded stock include grants from donor-advised funds, distributions from an IRA, and planned gifts. Each arrives differently and asks something different of the finance office.
Non-Cash Gifts at a Glance
| Gift type | How it arrives | What your organization needs | Who may need to be involved |
|---|---|---|---|
| Publicly traded stock, ETFs, and mutual funds | Electronic transfer of shares from the donor's brokerage firm | A receiving account, transfer instructions, and a sell-or-hold policy | Finance staff, the custodian, and the investment advisor |
| Donor-advised fund grant | Check or electronic payment from the fund's sponsoring organization | Current legal name, tax ID, and address, plus a process to thank the donor named in the grant | Development and finance staff |
| Qualified charitable distribution (QCD) | Check or payment directly from the donor's IRA custodian | A way to identify the donor and send a written acknowledgment | Development and finance staff, and the donor's financial advisor |
| Bequests and beneficiary designations | Distribution from an estate, retirement account, or life insurance policy, often years after the commitment | Legal name and tax ID for donors' documents, and a process for estate notices | Development and finance staff, and estate attorneys |
Donor-Advised Fund Grants
A donor-advised fund (DAF) is an account at a sponsoring organization that holds money a donor has already given to charity and from which the donor recommends grants over time. DAFs granted about $65 billion to charities in fiscal year 2024, according to the Annual DAF Report 2025 from the Donor Advised Fund Research Collaborative. Speaking at a Raffa Learning Community webinar on donor engagement in October 2026, Sarah Clough of Marts&Lundy described DAFs as “often underutilized or often under considered by fundraisers,” since the money is already committed to charity and waiting to be distributed.
The grant legally comes from the sponsoring organization, and the donor generally received any tax deduction when contributing to the fund, so the organization typically thanks the donor without issuing a tax receipt. Your CPA can confirm how to record these grants.
Qualified Charitable Distributions
A qualified charitable distribution (QCD) is a transfer from an IRA directly to a charity by an IRA owner who is 70½ or older under current law. According to IRS Publication 590-B, a QCD counts toward the owner’s required minimum distribution and is excluded from taxable income. The annual limit applies per IRA owner, is adjusted for inflation each year, and is $111,000 for 2026, under IRS Notice 2025-67. For an IRA owner who does not need a required distribution for living expenses, a QCD is a way to direct that money to charity instead. QCDs cannot be made to donor-advised funds or supporting organizations, and most private foundations are also ineligible, which can matter for an association’s related foundation.
For the finance office, the main task is identification, since the payment comes from the IRA custodian and may not identify which donor directed it. The donor will also need a written acknowledgment from your organization, as with other gifts.
Planned Gifts
Planned gifts, such as bequests and beneficiary designations on retirement accounts or life insurance, call for preparation long before the money arrives. Because donors name the organization in their own estate and account documents, they need its correct legal name and tax ID, and the finance office needs a process for responding to estate notices when a gift is eventually distributed.
How Can Development Staff Help Donors Give Wisely?
Development staff can help donors give wisely by recognizing when a different giving option may fit the donor’s situation, then bringing in the professionals who can advise on it. Donors sometimes know how much they want to give without knowing the most effective way to give it. Development does not need to become the donor’s tax or investment advisor, but it helps to have enough fluency to recognize situations like these:
- Appreciated securities: A donor who holds stock that has grown in value may be able to give the shares directly rather than selling them first, which may reduce the taxes the donor would otherwise owe. The donor’s tax advisor can confirm.
- A business sale or other liquidity event: A donor who has sold, or is about to sell, a business may have more capacity to give in that year than in a typical one. Gifts made from the proceeds can be planned around the donor’s overall tax picture for the year of the sale, which is a conversation for the donor’s financial advisor and CPA.
- A high-income year, windfall, or inheritance: A donor with unusually high income, a large bonus, or an inheritance may want to give more than usual in that year while spreading support over time. A donor-advised fund may allow the donor to contribute, and generally claim the deduction, in one year and then recommend grants to your organization over several.
- Retirement: An IRA owner age 70½ or older may be able to give through a QCD, which can count toward a required minimum distribution and is excluded from taxable income. This option can suit donors who do not need their required distribution for living expenses.
- Legacy planning: A donor working on an estate plan may be considering a bequest in a will or trust, or naming your organization as the beneficiary of a retirement account or life insurance policy. These gifts may not arrive for years, so the donor’s estate attorney will need your organization’s legal name and tax ID, and a donor who shares the plan gives your organization the chance to thank them and keep them involved.
Knowing the profile of your donor base helps you decide which of these options to explain first. An organization whose donors are mostly retired has different conversations to prepare for than one whose donors are early in their careers.
When a conversation reaches this point, ask whether the donor is working with a financial advisor, CPA, or estate attorney, and whether that person should be part of the discussion. Bringing the donor’s advisors in early can help the donor understand the available options before a decision is made rather than after. If your organization’s investment advisor offers donor engagement support, that advisor may also be able to join the conversation to explain giving options in general terms.
How Raffa Can Help
At Raffa, we provide investment management for nonprofits and associations, overseeing portfolios under each organization’s Investment Policy Statement, including the proceeds of donated securities. We also help organizations put their investment policy and reserve structure in writing, so a donated asset has a defined place to go once it arrives.
Through our Donor Engagement Support, we work alongside development teams, providing donor education on planned giving, donor-advised funds, and tax-efficient giving, joining donor conversations that call for financial expertise, and meeting with donors directly on general giving questions. We can also explain the options for gifts of appreciated securities and assist with the transfers.
Schedule a Meeting With One of our Nonprofit Investment Advisors
Frequently Asked Questions About Non-Cash or Stock Donations
Does a nonprofit pay tax when it sells donated stock?
A public charity generally does not pay tax when it sells donated stock, because the IRS excludes gains and losses from the disposition of property when computing unrelated business income for a tax-exempt organization. Private foundations are treated differently, since they pay an excise tax on net investment income that can include gains on donated shares. Your CPA can confirm how this applies to a specific gift.
Can a donor-advised fund grant pay for a gala ticket or membership?
A donor-advised fund grant generally cannot pay for a gala ticket or membership when the donor would receive something in return. Grants that give the donor more than an incidental benefit are not allowed, and the National Philanthropic Trust’s grantmaking rules, for example, state that a DAF grant cannot pay the deductible portion of an event ticket whose full price is not deductible. When a benefit is involved, the donor generally pays for it personally rather than through the fund.
Can an association accept stock donations?
An association can accept a gift of stock, but because a 501(c)(6) is not a charitable organization, the donor generally cannot claim a charitable deduction for it. An association that wants to offer deductible giving can do so through a related 501(c)(3) foundation, which, as Jeffrey S. Tenenbaum, Esq., explains in an article on our site, needs to stay financially and operationally separate from the association.
View our Sample Reserve Policy, Sample Investment Policy, and guide to creating both governance policies for assistance.
Can a nonprofit accept mutual fund shares or ETFs?
A nonprofit can generally accept mutual fund shares and ETFs through the same brokerage account it uses for stock. ETFs transfer between brokerage accounts the same way individual stocks do. Mutual fund shares can also be transferred, though the process may involve the fund company, so it is worth starting early, particularly near year-end.
What is a nonprofit stock donation policy?
A nonprofit stock donation policy is a short, written set of rules for gifts of securities. It names which securities the organization accepts, which account receives them, whether shares are sold on receipt or reviewed, who has authority to sell, and how gifts are acknowledged and recorded. It may stand alone or sit within a broader gift acceptance policy, and it should be consistent with the nonprofit’s investment policy.
About the author
Juliana Salamone, CFP®
Juliana Salamone, CFP®, is a Senior Portfolio Manager at Raffa Investment Advisers, where she works with nonprofit clients and individuals on investment strategy, financial planning, and portfolio oversight. She is a CERTIFIED FINANCIAL PLANNER® professional and an investment adviser representative of Raffa.
Disclosures: Raffa Investment Advisers is a registered investment advisor with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.
All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results. Indexes are unmanaged and cannot be invested in directly. Any forward-looking statements are based on current expectations and are subject to uncertainties.
This article is for informational purposes only and should not be construed as personalized investment, tax, or legal advice. Tax rules described here are general, may change, and depend on individual circumstances. Please consult a qualified tax professional about a specific gift.
Statistics on donor-advised funds are drawn from the Annual DAF Report 2025 published by the Donor Advised Fund Research Collaborative. Raffa is not affiliated with the report’s authors and has not independently verified the data. Comments attributed to Sarah Clough of Marts&Lundy are drawn from a Raffa Learning Community webinar held October 6, 2026, and reflect her own views.
Portions of this article were drafted with the assistance of AI tools and reviewed by Raffa Investment Advisers staff for accuracy and compliance.