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Policies are great — but you need procedures, too

I have the privilege of working with many nonprofits to create or update their gift acceptance policies. This policy is the set of guidelines adopted by your board and/or senior leadership, that balances the need for fundraising with the risk the organization is willing to take in accepting various types of gifts.

For example, taking cash is a no brainer. It’s fairly easy to know when the gift leaves the donor’s hands and gets to the nonprofit, there’s no question about what it’s worth, and the nonprofit can use it right away without any additional steps.

I’ve always put publicly traded stock in the same category as cash, but I recently had two colleagues tell me how they’d never want their nonprofit to accept stock as a gift. I was stunned, so wanted to hear their stories.

One colleague told of the donor who asked for the nonprofit’s bank account information to make a stock transfer through the automated system. The nonprofit gave the donor their regular checking account information, though (they didn’t have a brokerage account), and the transfer never went through. No one caught it until much later, when the value of the stock had decreased, making the donor’s gift much smaller.

Another colleague told me of the donor who handed him stock certificates as a gift. He took them to the bank and couldn’t deposit them in the nonprofit’s account because additional documentation was required from the donor. My friend ended up making multiple trips back to the donor to complete the documentation, all the while worrying about keeping those valuable stock certificates safe.

Both of these stories illustrate how a policy that says you’ll accept stock as a gift from your donors doesn’t give you or your staff all the tools you need actually to accept these gifts. You’ll also need procedures that give step by step instructions on how to receive, deposit, credit and probably liquidate that stock. Receiving stock through an automated transfer to your brokerage account is quick, safe and easy for your donors, if the account is established and you have the transfer instructions readily available. Receiving stock certificates is similarly quick and easy if you have all the additional forms and documents your bank will require to document the transfer and allow you to deposit in your brokerage account.

Your financial institution can and should help you develop those procedures. Check with your representative and don’t leave this easy money on the table!

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