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    Procedure for Charities to Accept Stock Donations

    [fa icon="clock-o"] Apr 1, 2015 1:56:00 PM [fa icon="user"] Kathy Dise [fa icon="folder-open'] Small Business, Nonprofit, For Accountants

    Even small and midsized organizations can accept donations of stock. Here’s how: stock_certificate

    1. Set up a brokerage account

    • Choose a low transaction fee provider such as Schwab
    • Ask a board member for suggestions on where to set up an account

    2. Establish an Investment Policy

    • Most organizations have a policy to liquidate stock immediately to minimize the risk of the stock depreciating in value and causing a loss
    • You can find a sample investment policy here

    3. Send Donors the Stock Donation Form Here 

    4. Donor Sends Completed Stock Donation Form to their Broker

    5. When Stock Donation is Received, Enter Transaction in QuickBooks

    • Calculate the value of the Donation = average of the high and low prices on the date of the gift. (this assumes the donation is publicly traded. If it isn't publicly traded, you should think twice about accepting the donation.)
    • At time of donation, Increase Investments (Asset is debited) and Increase Restricted/Unrestricted Fund Balance (Equity Account is credited)
    • After sale of stock Decrease Investment (Asset is credited), Increase Bank Account (debited), and Difference (Income Account – Gain or Loss from Investment may be debited for loss or credited for gain). Fees and commissions are expensed.

    6. Acknowledge the Donation

    • Send a Letter. Amount of the donation is the average of the high and low prices on the date of the gift.
    • Samples can be found here
    Download stock donation form
    Kathy Dise

    Written by Kathy Dise

    Kathy has over 30 years experience helping small businesses succeed. As a commercial lender, commercialization expert and now as a QuickBooks diamond level advisor, Kathy understands the challenges small business owners face. Her experience helps business owners quickly accomplish their financial goals. As the owner of BudgetEase, Kathy works with clients to develop a plan to efficiently process 1,000s of small transactions so owners can make informed decisions. She lives in Shaker Heights, OH with her husband Ralph and enjoys golf, curling and walking in Cleveland’s fabulous Metro Parks.