Stock gift entry procedure

Amanda Antony 2

I just started a new org with 6 years of RE experience under my belt. When the stock gift entry procedure was explained to me, I was quite baffled. 


When we are notified by our stock broker that a stock was transferred to our account, a stock gift is entered onto the constituent's record. It was explained to me that since it can sometimes take weeks for the stock to be sold and a check issued, there are times when other team members pull queries/reports and show that the constituent hasn't given and is then solicited. Then when the check is received, the stock is entered in a batch and processed. Then the first stock gift is deleted and the second gift record is marked as "sold".


Entering gifts through batch is a must at my org, so how do we:

1. Eliminate the need to delete a gift record?
2. Process the sold stock through batch?
3. Prevent the constituent from being considered as not yet given?

Thanks!

James Kew

I suspect you are powerless to do anything about this, but it shouldn’t be taking weeks to get donated stock sold.  My organization sells all securities gifts promptly upon receipt, even if the donor urges us to hang on to the shares because “the stock price is going to go up.”  Otherwise, the charity is taking unnecessary market risk.
Depending on how things work there, might you be able to mark your initial “placeholder” entry “Do Not Post,” providing your colleagues with information that the donor has, indeed, made a gift, and then later, when you have your sales details in hand and are ready to record the gift “for real,” you edit the existing line item as needed and change the post status to Not Posted (or perhaps Posted, again depending on your procedures/interfacing with finance or lack thereof)?
For what it’s worth, I’ll just describe the process here on the chance that it is helpful to you in some way.  Our finance people monitor the brokerage account and send me information whenever a new securities gift arrives.  I am provided with the number of shares, what stock or fund it is, and what day it arrived in the brokerage account.  Then I confer with our fund raisers as necessary to identify who sent the gift and for what purpose it was given, as we typically receive several “mystery” stock gifts per year that require research to identify the donor and any designation. (I’m happy to report that most donors do let us know in advance of their securities gifts, though.)  I follow the IRS guidelines that taxpayers are to follow and multiply the number of shares by the simple average price at which the stock traded on the transfer date.  I enter the stock gift promptly into the constituent’s giving record at the calculated value for our internal record-keeping purposes and never touch the amount thereafter, as our office “doesn’t care” what the sales proceeds amounted to.  We leave wrangling with the discrepancy between the “gift” value and the sales proceeds to our accounting staff and don’t even use the “Sell Stock/Property” functionality in Raiser’s Edge.
I’ll conclude this not-too-helpful reply with the hope that others will be able to provide better responses than mine!

JoAnn Strommen

I agree with James regarding selling stock more quickly. We sell same or next day. We do use the "stock sold" feature in RE. Gifts are entered in batch.


I don't like the idea of entering and then deleting the gift. If it's just a small # of instances can't your solicitors just be told that Jane Doe has a pending gift when you learn of the stock gift?

Amanda Antony 2

The org does not hold onto the stock, however it seems that it can take time for the broker to actually send the check. It was the same at another org I was previously with. Sometimes it would take one to two weeks to receive the check. I also hate the idea of deleting gifts for many reasons. It seems like the ideal (at least according to RE developers) is that the stock is entered as a gift right away, then when it is sold, the stock gift is marked as sold. So I guess the real question is how do I process the sold stock check through a batch and apply it to the original stock gift?

James Kew

I think I'm finally understanding that your finance people don't actually want the stock to hit the ledger at all at its true fair market value, or even as "stock" per se, and they want one, and only one, entry on the ledger associated with the stock gift, so when the sales proceeds check arrives, they want you to record the stock at the dollar value of the check.  But in the meantime, you need to enter a placeholder gift in the constituent's record to keep that constituent from being solicited while you're waiting for the proceeds check to arrive, then later delete that gift.  And I suspect the one and only entry you are making is supposed to "look" like cash, not stock, on the ledger (i.e. they are not using a special debit general ledger number to signify that this gift is actually stock).  If this is the case, I think accounting needs more "fanciness" in the debit GL number department, to enable you to book the stock properly at its fair market value when you receive it.  Then, when the sales proceeds check arrives, you officially sell the stock in Raiser's Edge, and the Sell Stock/Property function passes the modifying dollar amounts to the ledger, using the right general ledger pairs.  But they're not going to change their procedures, are they?    It sounds as though you may be stuck with having to delete the placeholder gift.

Here are two Knowledgebase articles that seem germane to this discussion:

https://kb.blackbaud.com/articles/Article/38427
https://kb.blackbaud.com/articles/Article/75161


I wish you much luck with this.  We deal with many oddball situations in this line of work, don't we!

 

Amanda Antony 2

Thank you so much for all the responses! I'll take a look at the articles and see if it's anything we can try to implement here. Funny thing is... we don't share GL/fund info through FE/EE. But regardless, this might be one of those "pick your battles" situations. 


Thanks again!

Gracie Schild

Hi - At my former organization, there was a standing order to sell stock on receipt, but we still had to record both figures - value on receipt (Gift Amount credited to the donor) and the net sales amount (what actually shows up in the bank). Just as the Gift Date isn't necessarily the deposit date for a check or credit card, the Gift Date and Amount for a stock donation should reflect when it changed hands and what it's value was at that time. Whether ultimately the organization makes a profit or takes a loss isn't the donor's business or fault, so we recorded the gift as having arrived on the day our bank/broker received it and the value they set on it (we didn't do the calculation ourselves). The Sold amount would be reported to us a day or two later and that would be entered on the stock sold info screen. Our situation was made even more complicated by the fact that the Foundation was receiving and processing the gift, but we were actually using the bank and trust account of the college to receive and sell the stock (the Foundation's bank wouldn't let it set up a brokerage account for 4 or 5 transactions a year). So the college would transfer the money to the Foundation, and the Foundation would transfer the money right back to the college the next time a transfer was processed (usually every month). The reports I ran to prepare the transfer showed a stock sold amount if there was one, so I would change the Gift Amount on the report only  to match the Sold Amount. That way we were transferring what we actually received, not what the donor was credited with in RE. The Foundation's books were in QuickBooks, so that was cash only and we only made a memo note on the deposit of who the donor was and what the gift amount was in RE. When the college received the "stock donation", they recorded it in FE exactly as it came to them - a donation check from the Foundation. 


I agree that the solicitors should get an email, or you should put a temporary business rule flag on the stock donor, or some similar workaround should be in place to avoid contacting the donor for more money - that just makes everyone look like idiots! But I can only wish you a Controller as intelligent and helpful as the one at my former organization - we could always talk through the intricacies of these weird problems and come to a solution. There's ALWAYS a way to make it work, but Finance offices tend to have a "my way or the highway" mentality!


Gracie Schild

Bluebird Business Services

Santa Fe NM