FAQs. Which types of stocks can I give?

Currently, the Overflow platform can facilitate the donation of publicly-traded stock.

WHICH TYPES OF PUBLICLY-TRADED STOCK CAN OVERFLOW ACCEPT?

Common Stock: All publicly-traded companies issue common stock. The share price of common stock can fluctuate throughout the day, reflecting investor demand and stock market state. Since there are no price ceilings, it is possible for share value to significantly appreciate in value, sometimes by double or triple. However, it is also possible for stock to decrease in value. 

Employee Stock Options: Is an option given to an employee to buy the company's stock at a specific purchase price in the future. The goal is to incentivize the employee to work hard and contribute to the company's success, so the price of the stock eventually increases beyond the grant price. These options are broken down into two categories: 

• Incentive Stock Options (ISOs): ISOs are qualified stock options and are taxed when an employee eventually sells the stock rather than when an employee exercises their right to buy the stock.
• Non-Qualified Stock options (NSOs): NSOs are taxed when an employee exercises and buys the shares as well as later when the employee sells the stock. The timing of these actions can influence whether the stock option is taxed at ordinary income rates or capital gains rates.

Restricted Stock Units (RSUs): Shares of stock granted to an employee at a specific grant price. RSUs have a future vest date, at which point they will be automatically sold. The value difference between the market price and the grant price of the shares is the reward that the employee receives and is taxed like their wages. Unless they are donated!

Employee Stock Purchase Plans (ESPPs): Allow employees to set aside some of their wages to purchase company stock at a discount. The shares are not taxed at the time of purchase. When the shares are eventually sold, part of the gain is taxed at ordinary income, and part at a more favorable capital-gains rate. 

WHICH TYPES OF STOCKS DOES OVERFLOW NOT SUPPORT?

Fractional Shares

Currently, you can only donate whole shares of publicly-traded stock through the Overflow platform

Private Stock

Currently, Overflow does not accept stock donations if the shares are with companies that are privately held.

International Stock

Currently, Overflow accepts donations of shares from publicly-traded companies located in the United States, with some exceptions. If you would like to donate shares from a company located outside the United states, please contact [e-mail].

Interested in donating private equity to your favorite nonprofit through the Overflow platform? Stay tuned! Overflow is hard at work building out a process to make this happen.

Citation:

https://www.cornerstoneplanning.com/newsletter/item/what-is-the-difference-between-a-stock-option-and-an-rsu#:~:text=Typical%20rewards%20are%20stocks%20options,may%20also%20include%20Performance%20Shares.&text=Stock%20Options%20are%20a%20right,future%20at%20a%20particular%20price.

*The above references an opinion and is for informational purposes only. It is not intended to replace investment or tax advice. Please seek a duly licensed professional for investing or tax advice.

Have more questions about stock donations? Email our Donor Operations team at [e-mail].