After a donor initiates a stock gift to your organization, you have two options for receiving the donation: liquidate it or send the gift to your brokerage account.
LIQUIDATION
By opting in to Overflow's liquidation services, Overflow acts as your authorized agent to receive stock donations on your behalf. The donations are liquidated within 24 business hours of receipt and sent as cash to your organization's bank account once settled.
THE PROCESS
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Donor initiates a stock donation
- When a donor makes a gift through the Overflow platform connected to your giving page and clicks "Send Gift", the stock gift is initiated.
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Overflow processes and executes the stock donation on behalf of the donor
- Once the gift is initiated, Overflow processes the gift. This can take up to 1 business day.
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Stock donation leaves donor's brokerage account
- The timeframe for when the stock leaves a donor's brokerage account can vary based on the donor's brokerage:
- Charles Schwab (0-1 business days)
- Fidelity (3-5 business days)
- E*Trade (7-10 business days)
- The timeframe for when the stock leaves a donor's brokerage account can vary based on the donor's brokerage:
-
Stock donation arrives in Overflow's brokerage account.
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Stock donation is liquidated by Overflow.
- Overflow liquidate stocks with 24 business hours of receipt.
- The liquidation usually takes up to 2 days to settle.
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Stock donation is paid out in cash by Overflow to your organization's bank account.
- All admins on your Overflow account will receive an email notification with important gift information such as the date received, date liquidated, and amount sent to your bank account.
- Liquidated cash proceeds are received in your organization's bank account. 🎉
WHY WOULD LIQUIDATION BE AN OPTION FOR MY NONPROFIT?
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No need to open a brokerage account.
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Receive gifts in cash directly to your bank account.
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Identify and resolve potential issues quicker.
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Potentially faster processing times depending on brokerages involved.
BROKERAGE
If you choose to receive stock donations in-kind, the donated share will transfer directly into your organization's brokerage account.
THE PROCESS
-
Donor initiates a stock donation
- When a donor makes a gift through the Overflow platform connected to your giving page and clicks "Send Gift", the stock gift is initiated.
- When a donor makes a gift through the Overflow platform connected to your giving page and clicks "Send Gift", the stock gift is initiated.
-
Overflow processes and executes the stock donation on behalf of the donor
- Once the gift is initiated, Overflow processes the gift. This can take up to 1 business day.
- Once the gift is initiated, Overflow processes the gift. This can take up to 1 business day.
-
Stock donation leaves donor's brokerage account
- The timeframe for when the stock leaves a donor's brokerage account can vary based on the donor's brokerage:
- Charles Schwab (0-1 business days)
- Fidelity (3-5 business days)
- E*Trade (7-10 business days)
- The timeframe for when the stock leaves a donor's brokerage account can vary based on the donor's brokerage:
- Stock donation arrives in your organization's brokerage account. 🎉
WHY WOULD BROKERAGE BE AN OPTION FOR MY NONPROFIT?
- You prefer immediate visibility of when the gift is received.
- You want more control over what you can do with the shares, for example, whether to hold or sell.
- You'd like to save on processing fees. (Brokerage processing fees are 2% whereas liquidation processing fees are 3%).
FAQ:
Which option is better for me?
We always recommend reaching out to your financial advisor or professional for advice on how to best plan the receipt of gifts to ensure it aligns with your financial strategy and policies.
How will my donor determine the charitable value of their stock? Does the value change from the date they make the donation to when I receive the donation?
Typically, donors determine the charitable value of their gift with their tax professional based on the date the stock is received into the receiving brokerage (either the organization's brokerage or Overflow's brokerage). Their tax professional will then typically take the high-low average (the fair market value) on this date to determine the charitable value of the gift. NOTE: Donors are responsible for seeking tax advice from professionals.
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Overflow does not provide tax, legal, compliance, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, compliance, or accounting advice. Your organization should consult its own tax, legal, compliance, and accounting advisors before sending or concluding any transaction, communication, or otherwise.
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