Year-End Stock Donations: What You Need To Know

One of the best ways you can partner with your donors in their philanthropic goals is to help them realize the tax benefits of charitable giving. For supporters that are hoping to take advantage of the tax benefits of donating via stock, we recommend they submit their gift by December 10th.

We recommend stock gifts are submitted by December 10th because, in order to be eligible to receive a charitable tax deduction in this calendar year, the stock must be transferred by December 31st.

Generally, a stock donation is considered “complete” by the IRS on the day it is received by the nonprofit (for clients that use their own brokerage accounts) or when it is received in Overflow's brokerage (for clients utilizing Overflow's liquidation services), not the day the donor submits the transfer request. This distinction is important because brokerages receive a much higher number of stock donation requests in December compared to the rest of the year. This can sometimes lead to delays on the sending brokerage side. 

Here is a sampling of the stock transfer processing delays experienced in December 2021:

• E*Trade Employee Stock Plans:3-week processing delays
• Merrill Lynch/MyMerrill/MerrillEdge:15-business day processing delays
• Fidelity Investments:7-business day processing delays. 

We know how important it is that your donors are able to recognize their stock gifts in the intended tax year. Because we can’t guarantee the speed of a transaction once the transfer request is in the hands of the donor’s brokerage, we recommend that donors try to initiate their stock contribution request by December 10th. This allows for sufficient processing time to ensure the donor receives their intended tax benefit. 

Here's what you need to know to be the best philanthropic partner for your stock donors this year:

1. We recommend you communicate this timeline to supporters when sharing about giving via stock. Download a one-pager you can give to donors below.
2. For transactions that arrive after December 10th, our concierge team will use strategies to increase the chances that the gift is processed by the end of the year. This means that yes, we will continue to accept and process donations through December 31st! Please note we may reach out to your donor to confirm some details with them prior to initiating the transaction if it comes in post-December 10th.
3. For any contributions initiated on or after December 23rd, donors will be clearly notified that the chance of their gift being received within the same calendar year is very low because of market closures and brokerage delays. Donors will still have the opportunity to proceed with their stock gift should they choose to do so. 

Helping your donors realize their generosity is our highest priority. We hope that providing this information and setting correct expectations will result in the best donor experience possible. Click here to download a resource that you can share with donors to communicate this information.