acknowledging gifts of stock and gift amout

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Greetings

I am looking how to acknowledge donations of stock. I have used the formula of average of high sale price and low sale price on date of transfer/receipt. Then multiply that by number of shares. Therefore the donor is receiving the full value of stock for tax donation.

A colleague recently told me that you use the amount of check from brokerage firm which is stock value minus broker’s fees. This is the gift amount for donor.

Interested in what method or other methods people use and how people record in Raisers Edge. I know there is the Sell Stock/property option of gift.

Thank you 

Ken

 

Comments

  • We use the average of high/low for the date of transfer multiplied by the number of shares, and this is what the donor is receipted for. The letter reads "Thank you for your gift of ## shares of XXX stock. On, MM/DD/YYYY, the date of transfer, the median value of $$$ resulted in a gift of $$$." We use the sell stock/property function, and that is where you can account for a gain/loss and any fees. If you hold on to the stock before you sell it, there can be a very large difference in the value when it was given and the actual check you receive for it.
  • We record the High, Low, and Mean for the Transfer Date on Gift Attributes (with 3 decimal places).  Those 3 figures as well as the Total Value are included in the acknowledgement letter to the donor.  The High and Low are looked up on Google Finance.


    I believe that the broker fees are a cost of doing business and shouldn't be reflected in the amount reported to the donor.  If your org, like mine, doesn't sell the stock immediately, you wouldn't know what those fees will be...


    RE does have a Gift Type of "Stock/Property Sold" which does give you a place to record the broker's fees.  But none of the Stock Gift Types provide fields for High, Low, and Mean...only Number of Shares and Median.


    Below is the documentation (last updated in Oct 2013) for Stock Gifts.  The Valuation Form just lists all of the information on one page as a cover sheet for the paperwork and has checkboxes for who needs to receive the paperwork (Finance, CEO, CDO, CFO).  It's a Word form and actually does the calculation for you (for Mean and for Value).


    Hope this helps!  I'm sure there are several ways to do this.  My advise would be to work with your Finance Department and Auditors to be sure you are recording all of the data they might need and then document your process.

    Stock Gift Entry

     
    Fill out form StockGiftValuationForm.doc located at:
                                                                                                            G:\\DEV\\Information and Forms\\Forms

     
    Go to Google Finance (www.google.com/finance) and enter the corporation name in the search box.

     
    Click on “Historical prices” in the left-hand menu and be sure the date of the stock transfer is included in the list.  Print the page and use the data to complete the in-house form.

     
    Calculate the mean by adding the high and low then dividing by two.  Calculate the total value by multiplying the mean by the number of shares gifted.

     
    Create a pdf file of all associated paperwork (including the form and the Google Finance page).  File on the Media Tab and email it to those listed at the bottom of the form.

     
    Enter a Gift with the Type of Stock/Property in RE.  Be sure to include the name of the corporation, and on the Details window, the number of shares and code for the corporation.  Enter Stock High, Stock Low, and Stock Mean data on the Attributes tab of the gift.

     
    Generate the acknowledgement letter and be sure that all stock information is correct in the related paragraph (located in the receipt portion of the letter).

     
  • JoAnn Strommen
    JoAnn Strommen ✭✭✭✭✭
    Ancient Membership Facilitator 4 Name Dropper Photogenic
    Can I give Josh's answer more than 1 good answer vote? 


    Just got in and was reading thru email hoping someone put the answer he did. Ditto Josh's reply: receipt no values (their responsibility, why risk error), just date, description # and type, nothing with broker fees. 


    If you want more substantiation of this go to fundsvcs.org and read their archive posts.
  • Technically, Josh is completely correct. Including the estimated amount can open you up to issues for which the organization does not want to be responsible.


    However, many times the donors giving stock gifts are among the biggest donors of an organization. So including calculated amounts within the acknowledgement is more of a courtesy to them rather than a reporting requirement.


    At minimum, you should acknowledge their gift of "X shares of Y stock on Z date." If you do include amounts, it should be worded in a way that does not say you are thanking them for that amount. So something like "Thank you for your gift of X shares of Y stock on Z date. On that date, the mean value of the stock was (uh oh...ran out of algebra letters)."
  • Our receipt is worded per Zane & Josh's posts...it lists the transfer date, number of shares, company, high value, low value, mean value, and calculated total value.  (Because that's how/where they'll be recognized in our donor lists.)  Followed by our standard, "No goods or services were provided in exchange for this gift. This gift is tax-deductible to the extent allowed by law. Please consult your tax professional on the deductibility of your charitable gifts."  (Which is not exactly how I would prefer, but I was out-voted by our fundraisers and my boss.)  We also list the Donor Listing so they can see now how their name will appear in our next published annual report or other listing.
  • would zane or jennifer be willing to share the wording they use in their acks?


    i think we have been doing this wrong all along!
  • Thanks everyone - Great answers! This helps alot and confirms my thoughts

    Ken

     
  • Our ack letter (for stock gifts as well as most other types) contains all gift-specific data in a receipt box at the bottom of the page.  This box has merge fields and is fully editable as needed.  The intent is to provide as much information as possible, while instructing the donor to consult a tax professional for all legal/tax questions.  Here is the text from that box on the template for a stock gift:


    Gift Date: «IRSDate»     Number of Shares: «StockUnits»     «Purpose»
    The high value for «StockIssuer» stock on «IRSDate» was $«StockHigh» and the low value was $«StockLow», for a mean value of $«StockMean», representing a total value of «Amount».

     
    Donor Listing: «DonorListing»
    As you will be listed in our publications.  Please contact our Development Office at Development@xxxx.org or (513) 555-5555 to make corrections or changes.

     
    No goods or services were provided in exchange for this gift. This gift is tax-deductible to the extent allowed by law. Please consult your tax professional on the deductibility of your charitable gifts.



    The letter itself is updated at least once per year (unfortunately for me, we'll be updating it, in all of the templates, for the 4th time in 2 months by the end of this month).  It talks about the work we do, including statistics for the current or immediately past fiscal year.  This text can also be edited and customized.  Then there is space for our CEO to add a hand-written note if he chooses, which he usually does.
  • this is really helpful, thank you! i especially like what you have done there for donor recognition - as i prepare the annual report we are chasing down donor recognition for about 70 donors right now. we are careful about collecting it for high level membership society but not in other areas.


    :)

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