Podcast | Best-Kept Secret No More: Why Nonprofits Should Accept Stock Donations

Let’s start with some astounding numbers: More than half of all U.S. households own stock, and about 5 million stockholders have portfolios worth millions of dollars. For these individuals, a major gift such as $10,000 to a nonprofit would be a drop in the bucket. But this amounts to $50 billion of potential charitable giving from the top stockholders alone.

If you consider all stock owners, you could double the potential impact. So, with $100 billion of stock gifts at stake, it begs the question: why don’t more nonprofits accept stock donations?

In this episode of the Go Beyond Fundraising podcast, we talk with Steve Latham, co-founder and CEO of DonateStock. Latham has been determined to make it easier for people to donate stock gifts for more than a decade.

Why Is Stock So Important?

Stock is the most tax-advantageous way for donors to support your cause. If donors can make a pre-tax gift to you, it’s more likely to be a larger gift than they might give otherwise. For instance, since its founding in 2020, the average gift that DonateStock has processed is between $5,000 and $6,000.

Because many nonprofits aren’t set up to accept stock donations, they end up leaving money on the table. The donor will sell the stock, deduct the tax, and give the remainder to charity. This isn’t beneficial for either the donor or the nonprofit.

Say a donor wants to give $10,000 in Apple stock. If they sell it first, they’ll pay a capital gains tax of around $2,000 depending on where they live. So, the nonprofit would only receive $8,000. But if the donor can give the stock instead, they don’t pay the capital gains tax, and the nonprofit receives the full $10,000. The donor also receives additional tax savings for the large donation.

This is one of the best-kept secrets in charitable giving. But the hassle behind donating stock has turned people away from it. DonateStock exists to process stock donations for nonprofits so they can increase their revenue.

Best Practices for Nonprofits

Latham shares several strategies that nonprofits can use to both encourage and receive stock donations:

• Meet your donors where they are. Your donors should be able to support you on their terms and with their preferred form of currency. This includes stock, donor-advised funds (DAFs), qualified charitable distributions (QCDs), and even cryptocurrency.
• Let donors know you accept stock. This seems obvious, but don’t assume donors will catch such a detail. Don’t make them look for it either. Instead, put all the ways people can give in a prominent place on your website.
• Make it easy for donors to give stock. With DonateStock, for instance, it takes maybe five minutes for the first gift and about a minute for subsequent gifts. By simplifying the process, you make it more likely that donors will give additional gifts.
• Make sure you’re set up on the back end to process stock gifts. Historically, a challenge of receiving stock has been that nonprofits can’t tell who the donation came from. So, they’re unable to thank and steward the donor, which strains donor relations.

The Big Picture: Use Cases and Demographics

What the above best practices boil down to is more revenue for your organization. During our conversation, Latham also shared the impact some of his clients have seen. For instance, in its first year with DonateStock, World Central Kitchen saw stock proceeds increase from 1.3 percent to almost 9 percent.

Two other clients, Take Stock in Children and Chapman Partnership, received five- and six-figure stock gifts respectively just by letting their donors know that they could accept stock donations.

Latham also gives in-depth data on who stock owners are to help you better target your donors with requests. People who are 47 years old and up account for about 85 percent of the stock gifts that DonateStock has processed to date. Almost all are homeowners, about 80 percent are college graduates, and 60 percent are married. He even looks at donor locations, interests, and communication preferences.

Want to hear more? Listen to the full episode:

Transcription

Leah Fadling: Hello everyone, and welcome back to another episode of Fundraising Today and the Go Beyond Fundraising Podcast. We've got a great guest today: Steve Latham, the co-founder and CEO of DonateStock. Steve, welcome to the show.

Steve Latham: Thank you. Thanks for having me.

Leah Fadling: And then we also have Dawn Galasso back with us today. Dawn, glad to see you back here again.

Dawn Galasso: Thanks, I'm glad to join.

Leah Fadling: We've got a great topic today, which is stock donations. We had a conversation about non-cash giving about a year ago. And back then, the stock market was in a much different place than it is today. And we thought it would be worth it to have this conversation again, especially because some things have changed in the stock market. And we are coming up, as we’re recording today, on the year-end giving season.

And our friend Steve has a lot of stats that are really eye-opening to share about some of the untapped potential that could lie in your donor file. And so, Dawn, why don't you kick us off today with getting us into this conversation and getting into some background about why this is such an important topic.

Dawn Galasso: Yeah, thanks, Leah. Appreciate it. Steve, it's great to talk to you again. I'm super excited to have a conversation around why we need to focus on stock donations as nonprofits.

So, if you can start by explaining why it's so important for nonprofits to have the ability to accept stock donations, especially at the end of the year, and what motivated you to co-found DonateStock to facilitate this process.

Steve Latham: Yeah, I'll start with the latter because that's an easier story. So, 15 years ago, a friend of mine, a financial advisor, told me about the benefits of stock gifting. And I won’t get into the particulars as we get into this, but it sounded like such a good deal that I thought, “Wow, that sounds awesome.” I own some stock. I'd like to give some (to) the scholarship fund that had given me a scholarship in school.

And then I discovered why very few people donate stock. I went through the process manually of doing the research, calling the nonprofit, being directed back to my broker, being directed back to the nonprofit. It was calls, forms, emails, printing, signing, having to drop off a form. It was such, it literally took almost a week to get a small stock gift done. And it was such a hassle. It wasn't worth doing it anymore. And then that was in 2008.

And in 2020, my last company — I had spent the last 18 years in advertising and marketing technology. My last company was going to a final sale and exit event, and I was thinking about what I want to do next. And this had always been in the back of my mind that if no one solves this problem, then that would be a really fun one to tackle.

We started doing stock to, first of all, to make it easy for donors. That was the first focus on it. Not really understanding what happened behind the scenes, which is a whole different set of issues. But that was really it. It's something that I thought, “Wow, if we could make it easy then and remove the friction, we could unlock billions of funding for nonprofits.” And that was the original idea.

Why stock is so important — your first question — is really a few reasons. One is, it's the most tax-advantageous way for donors to support your cause. We can, again, talk about the benefits of stock gifting, but if donors can make a pre-tax gift to you, it tends to be much larger.

(The) average stock gift that we processed over the last two and a half years now is about between $5,000 and $6,000. So, they're larger gifts. They are more tax advantageous for the donors. And instead of paying taxes on it, they can actually give the nonprofit the money that would have gone to the IRS. You're not leaving money on the table like you are when you ask for an after-tax gift like credit or cash or direct debit. So, this is a way for larger pre-tax gifts to flow from where household wealth is concentrated. It's not checking accounts or credit card availability. It's their brokerage accounts.

And if you can allow them to share their wealth with you and invest in you, it's a very different conversation than, “Can you give us 500 bucks on your credit card?” knowing they're going to pay that bill next month. Most people that are donating stock are larger givers, donors, major gift donors, whatever you want to call them. But they've been in the markets, on average, 10, 15, 20 years. They have massive gains. And for them to know that, one, they can share those gains with you; two, that it's more tax advantageous; and three, it's easy. That's really why now, more than in the past, it makes a lot of sense for nonprofits to lean into it.

Dawn Galasso: Yeah, and you had mentioned the stat when we were talking before (about) the percentage of cash available (versus) stock available. So, can you go and expand on that percentage that you provided to me earlier?

Steve Latham: Let me, if I could share my screen with you, I'll show you a couple slides that might help. And for those listening to this, I'll explain what we're looking at.

The first chart over here is really looking at where household wealth is concentrated. These numbers actually need to be updated. It's now more like 90 percent/10 percent — that 90 percent of household wealth is in their investment accounts. It's in their brokerages, not their bank account, and uniquely advantaged for the donors.

What we've looked at is that if you think about the average — there's about 50 million active investors, the top 10 percent of portfolios in the millions of dollars — for them to give a $10,000 gift, a stock gift, is really, it's a rounding there on their daily portfolio movement.

If they have a $2 million portfolio, that's a half-percent movement every day, which happens all the time. So, it's really easy for them to give $10,000. That's worth $50 billion of potential funding. I think 5 million people, $10,000 in annual giving, from where they have millions of dollars, generally speaking, make your major gift donors. And that's the top 10 percent. Think about the other 90 percent of donors out there, that are people that own stock, the other 40-plus million people. They’re worth probably another $25–$50 billion a year, so there's $75–$100 billion in potential funding for nonprofits.

Today, most nonprofits don't solicit a whole lot of stock gifts. They tend to take them when someone says, “I really want to give you stock. Can you please accommodate it?” And okay, we'll do that for you because you're special, but it's really such a big opportunity because it shouldn't be 1 percent of your giving proceeds, and that's typically what we see.

Most nonprofits that can receive stock gifts might get 0.1, 0.2 percent of their gifts, but they’re larger gifts, maybe $5,000–$10,000 each on average, sometimes larger, depending on how many they get, and then that's 1 percent of the proceeds. But think about it: half of their donors own stock, and probably 90-plus percent of their major donors own stock. So, it could be a much larger component of their fundraising program.

A great example is that we have a case study with World Central Kitchen who signed up with us in December 2022. In the first year in 2023, stock went from 1.3 percent of proceeds — kind of industry average — up to almost 9 percent. And it grew on an actual absolute basis, 15-fold in one year. So, 1,500 percent increase in stock giving, increased from over 1 percent to almost 9 percent of proceeds. And that resulted in significant growth and diversification for them.

And in this market, this climate, where inflation is persistent, cost of living is higher, there's less cash left over for discretionary spending or investments. And that's why I think there's a lot of people feeling fairly cash tight. But if you look at where the market is, it’s more or less a few percent away from all-time high. All the most widely held largest stocks — think of Google, Amazon, Tesla, Netflix, Nvidia, Microsoft, and Meta/Facebook. They're at or near all-time high.

So, people who've been in these stocks for five, 10-plus years are sitting on massive gains. They might be feeling a little tight about the checkbook, but they have tons of capital in their brokerage account. So, that's the opportunity. We think it's worth tens of billions a year in incremental funding, which would more than offset this contraction in giving that we saw in 2022 and are probably looking at in 2023 as well.

Dawn Galasso: Yeah, that's great. Those stats are mind blowing and you're absolutely right about the idea that, the reason why 2022 was an off year and 2023 probably is going to be that contraction, is because people are feeling like they don't have the same amount of cash in their pocketbook. And so, by looking at alternatives like stock and identifying those individuals who would be willing to give that's amazing.

So, one of the key benefits you mentioned is the ability for the donor to offset capital gains taxes when they donate stock. And I think — you might even want to share that same screen that you had — because you have a description of why that is. So, can you unpack this a little bit more so that the listeners understand how it works and why it's actually a benefit, a win for both the donor and the nonprofit?

Steve Latham: Absolutely. And this is the thing that, when I heard about this in 2008, a light bulb went off. I was like, “Wow, that sounds too good to be true.” And what is it exactly? So, if you think about (this) situation, we hear these stories where a nonprofit has a donor reach out (and) says, “Hey, I've made some money on an investment. I'd like to donate my gains to you.” And great, they call the broker. They sell the stock, deduct the tax, and send the cash over. So, that's bad for the donor, and it's bad for the nonprofit.

Now, let's assume that someone wants to give you a $10,000 gift. If you bought Apple five years ago, it's up about 5x on average. So, let's say you paid $2,000 for Apple stock five years ago in 2018. Today, it's up about 5x from that. So, that $2,000 investment is worth $10,000. If you sell that stock, you're going to pay a capital gains tax of around $2,000, depending on where you live. So, this is pointing to the tax savings. So, it's going to vary based on the state they live in, but capital gains come in anywhere from all-in 18.8 up to like high thirties percent, depending on what state the person's in. And so, let's assume it's 25 percent of an $8,000 gain. That's a $2,000 capital gain tax they're going to pay, and then they can only deduct the $8,000 deduction.

So, I had $10,000. I sold it. I paid $2,000 taxes. My broker sends you $8,000, and then I can deduct or itemize that $8,000.

Now, if I donate the stock instead of the cash. I don't pay the capital gains tax. My stock goes from me to you or to a 501c3 processing the stock for you. You get $10,000 in nonprofit. I don't have to pay the capital gains tax; you’re tax-exempt, so you don't have to. And now I get to write off the full $10,000 donation as well.

So, not only am I saving $2,000 on the capital gains tax, I'm also getting another, probably $500 incremental tax savings, cash savings on itemizing a larger donation. So, it's a much more tax efficient way for donors to give. Most people don't know this. I jokingly say the best-kept secret (in) personal finance is stock gifting.

This has been a tool of the 1 percent–households for decades. And so, now it's really time to democratize and the beauty is everybody can get the same relative savings. You don't have to be Elon Musk to get the same really unique tax savings by donating stock instead of cash.

Dawn Galasso: That's astounding. I think the reason why it's one of the best-kept secrets is because of the challenge around being able to do it. That's one of the things that you had mentioned — that donors don't have a lot of information on how to give stock. And then when they are wanting to give stock, like you wanted to in 2008, the complexities around it are so hard. So, can you share some best practices or solutions nonprofits can use to handle stock donations more efficiently?

Steve Latham: Yeah, I'd start with the general idea of being more donor-centric — meeting them where they are. You're going to hear a lot more about that. We can't treat donors as a monolith, and we send you a request by mail and you send us checks. That model does not work anymore.

First of all, your donors should be able to support you how they want, when they want, whatever form of currency they want. And you should make those options available to them. So first of all, making it easy for them to donate, whether it's asking for their DAF contributions.

So, we're about opening non-cash giving. We don't have a play in DAFs or QCDs, but they should be absolutely taken advantage of. So, if you're not asking for a donor advised fund contribution, you're leaving money on the table. If you're not reminding people who are 72 and above that donations to you qualify as qualified charitable distributions, which allow them to offset required income that they have to recognize based on their IRA, then you're leaving money on the table. And again, there's 7 million retirees that could benefit from QCDs. There are 1.3 million DAF holders.

So, there's some pools there that you could fish in, but then there's an ocean of investors. Over half of U.S. households own stock in some form or fashion — 50 million active investors, but more like 100 million people actually have ownership of stock. So, in that case, it's about, one, let them know: “We can take your stock gifts and it's easy and it's more beneficial to you to give us a pre-tax stock gift than it is to give us your after-tax gift, and we'll make it easy for you.”

The key is really removing the friction for the donor, and it's not just the front end too. And this is the part that people who are still trying to figure out the whole stock gifting space don't fully appreciate. The worst thing you can do for a nonprofit is allow a bunch of people to start throwing in stock gifts to them without a scalable way to reconcile them, acknowledge them, process them.

The biggest problem with stock gifting, what we found, I mentioned early on, we started thinking about the problem for donors. Once we're in it, we realized there are some significant challenges for the nonprofits as well. The first and foremost biggest challenge is you don't know whose stock it is. When the stock hits your account, it does not say, “This is Steve Latham’s stock.” It says, “Ten shares of Apple showed up in your account. Oh, and five shares of Apple and another eight shares of Apple.” It's at an all-time high. You'll see people donate. Nvidia had a massive run this year. We saw a lot of people donating Nvidia, to the same causes.

You don't know whose stock is whose. And so, one, it's hard to reconcile, first of all, even if who was planning to send you stocks. A lot of people give the same stock — 20 percent of gifts that we processed are Apple, Microsoft, or Tesla. So, when you have a lot of people who own the same stock, the most widely held, largest cap stocks, you end up with not knowing whose is whose.

The bigger problem is when the donor assumes, because they filled out paperwork for their brokerage and went to all the hassle to document this for Schwab or whoever, they assume you know that it came from them, and you don't. So, then they're sitting there waiting for acknowledgment, a thank you note, a letter, an email, something, maybe a call — “Thank you for that five-figure stock gift” — and it doesn't come. And then the donors have a bad experience. So, even if you make it easy for them to donate, but you don't have a system on the back end to be able to reconcile those gifts quickly, acknowledge them quickly, let them know, “We received your stock.”

Most of the time, nonprofits find out someone sent them stock because they call them up, say, “Did you get my stock? Did you get my stock? I sent it to you.” And they're like, “What did you send us and when, and we'll go check.” And then it's research and talk to your treasurer to log into a brokerage account.

It's a broken and biased process. It's been a 1 percent solution, highly orchestrated donations to date. So, by making it easy for nonprofits to reconcile and acknowledge gifts at scale — and that's a key part of our value prop for the nonprofits is we can handle all that for them. And so, when you ask what a best practice is, you have to have a scalable way to reconcile and acknowledge gifts. And that's the hardest part because of the lack of information about the donor.

Dawn Galasso: So, you said something that blew my mind right now. That most nonprofits, if they get a stock gift, don't even know who gave them the gift, right? We're always talking about stewardship and acknowledgment and thanking and all the things, and you're accepting these gifts, potentially, that you're not even letting somebody know that you've received it and thanked them for it.

And that's, to me, horrifying, right?

Steve Latham: It creates a donor relations problem. So, without naming the organization —it's a top 10 nonprofit that I'm speaking with — about a year ago, we met. And they're like, “We have a challenge because one, we get quite a few stock gifts. Our development team wants more stock gifts because they're bigger. It helps us hit our goals. Our treasurer wants more. Problem is our operations (and) donor relations teams are struggling under the weight of what we already have because we have all these people that we can't acknowledge. We don't know (that) they sent us their stock. They assume we (get) their information through the brokerage, and we don't.”

So, it creates a donor relations problem if you try to scale up your stock gifting without a back-end process. And back to World Central Kitchen, a great case study. When we onboarded and we said, “Do you want to receive the stock in your brokerage account? Or would you like us to process it through a 501c3 that we set up to convert the stock and send you the cash?” And they said, “We have a fidelity account. Send it to us.”

A month in, and they're like, “No (more). We can't process these. We're having to hire temps to go through and look through records of emails and people have contacted us who said they might donate stock.” Or they had their brokerage information on their website, which is a disaster because then people get the information and send it — again, assuming that their information travels. A month in, they said, “You know what, we don't have a huge staff. We're trying to feed people in Ukraine and Eastern Europe. Can you handle this for us?”

So, we took over all that for them and, really, all we do is we send them money. We process their stocks. He acknowledges the donor, sends them an acknowledgment letter on behalf of World Central Kitchen, and we send them the cash in days — not weeks or months — after the gift is made, so they can get it to work and have an impact immediately.

So, that's really a critical part of it, is the ability to scale that. That's why the front-end solution doesn't work. It's good to remove that front-end friction for the donor, but you can create a bigger problem for your donors on the back end because they get really anxious. They send you $10,000 in stock that leaves their account, and they don't hear from you that you got it. It's not a $100 credit card (charge) that can be reversed by disputing; this is stock (that) goes out into the ether. So, that rapid acknowledgment is absolutely critical.

But if you do that, and you're the only one who’s asked me for stock, and I've got a lot more, now you stand to gain a lion's share of their brokerage accounts and divestible assets.

Dawn Galasso: I've even heard horror stories on the other side where a donor went to a nonprofit’s website and wanted to donate stock. So, they went through the whole process, that convoluted process, to give stock, and then the stock actually never gets processed.

It's stuck at the brokerage, and the donor is expecting a tax relief off of it. So, it's the end of the year, the beginning of the next year. And they're like, “Where's my tax exempt for this?” And they're like, “We didn't get it.” And the donor thinks that the nonprofit messed up. And it really, a lot of times it's not the nonprofit, but that whole relationship starts to crumble because of that situation on that end also. So, on both sides, without having the right structure in place, it can be a problem for any nonprofit.

Steve Latham: Yeah, I like to say, “It's not our fault, but it's our problem.” And that's the nonprofit situation when you're like, “It was not our fault. Your brokerage did not execute the transfer.” But donors look for someone to blame. And they can blame the broker, but good luck getting someone from Schwab on the phone to hear your complaints. So, that's a big problem, and that's where the monitoring is really critical.

That's another component of where they, without getting too deep in the weeds, realize that probably 5 percent of transactions don't get executed by the donor's broker. You send in the transfer form. So, we get the data from the donor. We send, on their behalf, a transfer authorization to transfer the stock from their account to the nonprofit account, but their broker still has to manually process that, enter that. Confirm it. And if they drop it or it falls through the cracks or they're too busy to get it done, then it gets lost. And like I said, the calendar, it turns when it turns. If they don't get their donation and it gets processed on a certain time, then they're out of luck.

So, that's a big part of it. We built in monitoring. If the stock has not been received in five business days, we're contacting the donor, like, “(Your) stock has not come in, please check your brokerage account, make sure it went out because there's a chance that your broker didn't execute the transfer.”

So, those things happen, right? Stock doesn't ever really get lost. It gets there as long as it gets initiated by the broker, but it is a manual process today. We're trying to work with some of the big broker dealers — the big names — and wealth managers. This is decades-old technology they're using and processes. We're trying to bring them up to more modern standards, doing things more server-to-server, more electronically, less analog in terms of how they do these things. But it's going to take time.

In the meantime, you have to have a really good workflow and monitoring system so that if something does get delayed, you can flag it quickly and course correct in time.

Dawn Galasso: Yeah, it's crazy that we're still doing stock donations the same way they were being done 25 years ago. And when I'm thinking about AI and all the other technology that's out there, it’s like, “Wait, we need to bring it into this century at least.”

Steve Latham: That's the purpose of FinTech because this legacy financial infrastructure — you can't retrofit it. You can't change it. You have to either rebuild it or you find workarounds. And that's really why there's a whole FinTech industry.

Dawn Galasso: I love that. So, I have a question about data. Obviously with me being the GivingDNA guru over at the Allegiance and Pursuant Group, is there data that you guys have found that helps nonprofits potentially identify … I know there's a large group of people — a huge percentage of individuals within the United States have some kind of stock. But when you're talking about the stock donor, is there data that you guys have found that is consistent across the stock donor? That you're seeing on a regular basis?

Steve Latham: There is. We started compiling some insights about donors several months ago to try to better understand, what does a stock donor look like demographically, socioeconomically, behaviorally? So, let me pull up another info sheet we have here. Happy to make (this) available as an attachment, if you guys can do that for the video, the podcast.

But this is data we were able to clean by processing our donor data to really get some insights about donors. Is that coming through okay? For those listening, it's basically an infographic showing the socioeconomic, behavioral, and demographic information about donors. So, I'll start with down here on age. This is a generational breakdown. So, 10 percent (are the) Silent Generation, before 1946; about 40 percent are Boomers; 35 percent Gen X. So, people who are basically 47 and up account for about 85 percent of the stock gifts that we've processed to date.

That's about close to 1,500 gifts. So, a decent set size sample. I think it's pretty accurate. It makes sense too, it's very intuitive. Gen Y, we see a small number of them and a few Gen Z's. But it's 85 percent people, let's say, late 40s-plus with a big mix between Gen X and Boomers. But Boomers and Silent are still half of stock donors.

And again, these are people who have been in the markets for decades. We see the purchase date on stock when it comes in, and people donate stock they've held (for) 10, 20, 30 years. So, especially if they got it as compensation, (they) received stock compensation from their companies and their cost basis is zero. Then they've got a bunch of it, and it's a great way for them to reduce concentration and harvest some gains.

The average giving capacity looks like a major gift donor — $25,000-plus per year. That's total giving capacity across channels. Again, we know stock to date is a very small percentage of that. It's also people who are highly likely to make major gifts — recurring donors, event attendees. So, think galas, golf tournaments, events where you spend money to come and look good — they're highly correlated with those. Most people who attend your gala are stock owners and can donate stock and give you a lot more, not for that table or for their sponsorship, but in auctions. Think about using stock as anything you use cash or credit for.

Almost 100 percent (are) household owners, almost half have children. And this is low, I think. It's not about the dollar amount of the average home of $700,000, because this is, again, across the entire country. You have some really high, high-priced real estate, some lower price, but they're basically double the median value for the area. So, that's more the way to think about that. The average stock donor has a home that's 2x the average of the median for their area.

Almost 80 percent are either graduate or bachelor's degrees, so educated. Sixty percent married. Fairly politically interesting. I don't think it shocks anybody that there's a higher propensity for people who are leaning left to support nonprofits than on the right, Republicans, if we had to be binary, Democrat or Republican. It's about 45 percent Dem and about 20 percent Republican. I guess that the rest is Independent.

States: this, again, probably has to do a lot with where wealth is concentrated. So, California, New York, Texas, Florida, the Carolinas, Colorado tend to be where we see the most to date, and Maryland. And then interests, they like nicer things: food, wine, videography. We're not sure if shooting is gun shooting or photography — probably not photography. I don't know what that is. I thought it was an interesting one there. But travel, golf, scuba, etc.

And then channel responsiveness is interesting: 77 percent respond to social, about 72 percent through email. Direct mail is still a big component, but I think it probably skews for older demographics. So, the older they are, the more likely they are to actually read their direct mail and respond to it. But you'll get phone, online advertising, even SMS, you get pretty high response rates.

I think what it tells you is there's no one way to contact a stock donor. They’re not a monolith. They're going to be up and throughout the spectrum. But generally speaking, they're people who are going to skew older, have assets, own homes that are twice the value of the median and are, generally speaking, generous people. That's why they're in the donor universe in the first place.

Dawn Galasso: I love that. Even the communication preferences, to me, that's your omnichannel donor too. They're responsive across almost all the channels, which is that omnichannel donor, which is always a higher value donor anyway. So, I think that aligns with everything else that we've been talking about up to this point.

Steve Latham: Yeah, you got to think about, again, meet your donor where they are. Communicate with them in the mode or the medium that's best for them. I don't know about you all, but I find myself saying, “Send me a text about something versus email.” Because I get so much junk email, and I miss important things. So, if it's a doctor's appointment or a bill's past due, please text me. That way, I won't miss it.

So, I'm increasingly finding myself opening up my text to other things too. It's, “Yeah, text me.” It’s easier. “SMS me your receipts,” etc. My email is information overload.

And I'm 54. I'm not a millennial. So, I'm square in the Gen X camp. And I probably live a little more tech than others, but at the same time, it's about ease and efficiency and what makes my life better. Even my mom, she responds to texts, and she's definitely on the higher end of the boomer side.

So, I think it's rethinking: Who is your customer? Your donor? How do they want to be engaged? How do they want to give? What's the most advantageous way for them to support your cause? And make sure you're making those options available to them. I think that's really one of the big takeaways for when we come out of this contraction in individual giving.

There are fewer donors. I don't know if you saw the Bank of America study that came out earlier this week, but it is a sad diagonal down line down to the right. The number of donors of even affluent households and the rest of the population — fewer donors. Historically, the last few years has been an increasing reliance on the mega-donor and the large gifts to make your budget. When those don't show up, and your base isn't continuing to make recurring gifts. I think, even amongst recurring donors it’s only 60 percent retention in 2022.

So, there's too many causes that are engaging people. And if you're not doing a good job of engaging and stewardship and building that relationship over time, you're at risk. And, I think, you can't take your base for granted. You’ve got to engage those people and those everyday donors. Make sure they stay involved and active as well as making it easy for them to give in different ways. (I’m) off on a tangent, but we can talk about this stuff for hours.

Dawn Galasso: I love it. I love it. As we wrap up, I would be really interested. You talked about World Central Kitchen and the success that they've had. Can you give us a little bit of insight of the things that they changed when working with you that helped with that success?

Steve Latham: Yeah, two words: easy button. That's an easy button for doing stock gifting. That's, think of us as PayPal for stock gifting. So, what used to be a painstaking, laborious process now, for the first gift, takes maybe five minutes. Subsequent gifts take 60 seconds. When you log in, you say, “I want to give my 10 shares of Apple, another five shares of NVIDIA to this cause,” and you can sprinkle it around or concentrate it. Making it easy, I think, is really the key there and removing that friction.

And it's a fun thing to do. It's the epitome of generosity. It's like, “I've invested well, I've earned returns. I'm going to share my winnings, my gains with the causes I care about. And if you make that easy for me, I'll do that a lot.” And that's what we find. We find 20 percent of our donors now have made on average three and a half gifts.

So, it's a high-recurring transaction. We're seeing now people coming back … start making their stock gifts again. We're starting to see old names reappear. And it's because, I think, at the end of the day, people are rational, logical. If you make it easy for them to support you in the ways they can and the ways (that are) the most advantageous, you're going to see great results.

Speaking of other nonprofits, I was thinking about a couple down in Florida, one called Chapman Partnership. They signed up and it was last-ditch, early December. They sent an email out to all their donors saying, “Hey, by the way, we could take stock gifts.” And they had six figures in gifts within a week. People were like, “Wow, we didn't know you did.” And they never had before. And “Here, I've got a lot of stock.” Especially people who are on fixed income and may not have a lot of cash, but they do have their portfolios that they have to get rid of at some point. That's an example.

Take Stock in Children was another one, and they did it, same thing. Five-figure gifts came in by letting their donors know. And these are the ones I hear about personally because of people I know reach out, but it's not a big leap. So, it's about making it easy. I think that's what World Central Kitchen found. Make it easy and be responsive quickly. That's the key to making people comfortable with their stock gifting and making recurring gifts.

Dawn Galasso: And I think there's one other thing you said that's important in addition to that, and that is, let people know you accept stock gifts. Because a lot of times your stock, if you are accepting stock, even in the traditional way, it's “below the fold,” is the way I like to say it.

So, they don't find it on your website. It doesn't become easy to find. So, to your point, those nonprofits that you said at the end of last year ended up with large, decent stock gifts at the end of the year. It was because they said, “Hey, we take stock.” Otherwise, they wouldn't have given in that way.

So, I think that's the third point that we'll wrap up with. Make it easy and let people know.

Steve Latham: That's key. I'm glad you said that because I would have regretted it if that point had not been brought in because that's so important. You can't expect people to dig through your site and find, “How do I do this?” You need to put it prominently on there: “Hey, you can now give to us in a lot of different ways. Give from your DAF, give from stock. If you want to give crypto, if you're that group, great. Give whatever non-cash assets you have, in addition to credit card, PayPal, direct debit, etc.”

I think they’ve got to be proactive. I think that was the point you raised. They can't wait for people to come looking for it. But if you're proactive, the early bird gets a lot of worms in this environment.

Dawn Galasso: Yeah, that's great. Thank you so much, Steve. This has been great. I've learned a lot today. It's been a pleasure to have this conversation with you.

Steve Latham: Thanks for having me. Really appreciate you all and happy to do this anytime.

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