Noncash assets, non cash assets, or non-cash assets. No matter how you spell it, one thing remains true:
Asking for non-cash donations remains the most overlooked and misunderstood strategy in the fundraising playbook.
And that’s a shame, because the long-term potential of this revenue stream for nonprofits is enormous.
Take for example stock donations. In 2018, stock donations to charitable organizations were valued around $21 Billion, up an incredible 62% from the prior year.
So you may be asking: why hasn’t every nonprofit swiftly embraced non-cash asset fundraising?
The common refrain we’ve heard from fundraisers suggests the problem is a general lack of understanding. That’s not entirely surprising, given that:
- Some of the most compelling data on non-cash giving is relatively new (i.e., from the past decade).
- Many donors are not aware of the greater impact non-cash donations can make while lowering their overall tax burden.
- Fundraisers often underestimate the potential reach of their non-cash donation appeals, so they underinvest in relevant strategies and resources.
But gradually, more nonprofits have overcome these hurdles to achieve non-cash asset fundraising success.
Which begs the question: could accepting non-cash assets be the missing piece to your current fundraising strategy?
To find out, scroll down to explore the what, why, and how of non-cash asset fundraising for nonprofits.
What Are Non-Cash Assets?
The term non-cash assets refers to a variety of items that can appreciate in monetary value, including real estate, privately-held stocks, mutual funds, artworks, antiques, and cryptocurrencies like Bitcoin.
Charitable donations of non-cash assets can include any kind of non-cash asset that a nonprofit organization is allowed to accept, whether legally and/or according to its gift acceptance policy.
Now that you understand the type of assets that fall into this category, it’s time to learn about the opportunities that lie in asking for these kinds of donations.
Insight #1: Most Wealth is Held in Non-Cash Assets
Nonprofits often ask for cash donations because it’s quick and easy to give. But there is a vast disconnect between the way donors give and the way they hold their wealth, which suggests that asking for cash is not always the best strategy for maximizing donor impact.
What does this data tell us, when paired with the fact that billions of dollars worth of non-cash assets are donated every year?
It suggests to us (and a growing number of fundraising experts like Dr. Russell James) that the dominance of cash-only fundraising strategies might be holding donors back from their true giving potential.
Insight #2: Non-Cash Giving Unlocks Tax Benefits for Donors
Sure, cash is convenient. It’s the easiest way to contribute to a good cause. But most donors don’t realize that other, more strategic ways to give exist.
How many of your donors—at least in part—give because they can write off their tax charitable contribution? Certainly many of them, probably most of them, maybe even all of them.
Donating non-cash assets can actually offer greater tax savings opportunities for your donors than donating cash.
While financial circumstances vary for each individual, this is generally how it works:
Let’s say you bought a non-cash asset (e.g., several shares of a stock) and held it for at least one year. Let’s assume that the stock’s value appreciated, and you want to sell it for cash for a profit. In this situation, you’ll likely owe capital gains tax.
Instead of selling the stock, you first decide to donate shares of that stock to a charity. By doing so, you are not required to pay capital gains tax on the appreciated shares you have just donated. Plus, you will likely be able to write off some or all of the donation as a charitable contribution.
The difference for many non-cash donors can be 20% or higher, if you account for capital gains tax rates at both federal and state levels.
What do these potential tax savings mean for nonprofits? First, your tax-savvy non-cash giving donors will appreciate that you offer this giving method. But there’s another important reason why accepting non-cash assets is worth your while…
Insight #3: Non-Cash Donations Can Make a Greater Impact
Accepting non-cash assets is a classic “win-win” scenario. Your donors not only get to lower their tax burden, they could also have more to give toward your organization.
“Many donors find they’re able to give up to 20% more to charity because of the potential to eliminate capital gains tax,” according to Schwab Charitable.
Picture your largest gift, or even your average gift. What would that extra 20% have done for your mission? If your organization is struggling with declining giving trends, wouldn’t it benefit from the substantial boost that non-cash giving can offer?
Talk About Donating Non-Cash Assets With Supporters
If your organization is keen on unlocking the potential of non-cash asset fundraising, you’ll need to help your donors connect the dots.
Cash donors may not be familiar with the tax benefits, may not know which organizations accept non-cash donations, or may not want to take the trouble to figure out how the process works.
“Donors who have never made a gift from assets may simply never have considered giving from wealth rather than giving from spare income,” writes Dr. James Russell, whose reports on non-cash fundraising have inspired countless fundraisers to re-consider this form of philanthropy.
Keep in mind that your donors may not be ready to give away their non-cash assets right away. Unlike cash donations, the timing of donation of assets like crypto and stock depends on factors like the donor’s return on investment and overall portfolio performance.
But these donations can still be effectively stewarded in a similar way that you ask for donations as part of your major gifts strategy.
Actionable Ideas to Drive Non-Cash Asset Donations
Use some of these simple tips to incorporate non-cash donation messaging into your fundraising strategy:
- Add specific non-cash assets into your website’s “Ways to Give” page
- Create a specific non-cash asset fundraising page with an online donation form
- Highlight the impact made by donors who have non-cash assets to you
- Improve your understanding of your major donors’ wealth-building strategies
- Include a reference about non-cash assets in your next direct mail campaign
- Create a fundraising message for your lapsed donors with a non-cash giving ask
- Speckle in mentions of non-cash donations in your conversations with donors
Fundraisers that can develop an effective strategy around this non-cash giving can unlock long-term increases in donation revenue.
Raise Your Fundraising Outcomes With Non-Cash Assets
It’s unmistakable: non-cash asset fundraising is on the rise. You can’t go to a nonprofit conference these days without seeing panels about growing trends like crypto and stock donations.
Maybe you’re intrigued because half of America’s top charities accept cryptocurrency donations. Or you’re just looking to modernize your stock giving platform, instead of requiring donors to email your major giving team before giving.
When you’re ready to explore the possibilities, The Giving Block is here to walk you through the benefits and solutions available to your organization.