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Unlocking Gifts of Stock: 5 Essential Prospecting Steps

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If you want to make stock giving a recurring part of your development strategies, how do you get started? If you’ve never solicited non-cash gifts like stocks, donor advised funds (DAFs), or crypto before, you likely have a few questions.

Just like with major gifts of cash, you’ll need an organized prospecting-solicitation-stewardship pipeline, but one adapted specifically to the goal of securing gifts of stock. Let’s walk through the fundamental steps of constructing this pipeline:

  1. Review your current state.
  2. Create stock giving personas.
  3. Segment your donors and prospects.
  4. Keep the conversations going.
  5. Maintain your stock giving pipeline.

We’ll also review one important pitfall to keep in mind as you develop your stock giving program. 

If stock fundraising is a new undertaking for your team, remember that it’s a challenge worth tackling—the average stock gift is worth $5,000, and nonprofits that prioritize non-cash forms of giving have been found to grow six times faster than their counterparts! Following the best practices outlined in this guide will help you tap into those benefits quickly and sustainably.

Step 1: Review your current state.

Before you dive into building a new giving program, you need to know where you’re starting. Survey your supporters to identify immediate stock giving prospects. Keep in mind that if you’ve loosely promoted stock giving in the past, some donors may have already donated stock. (Nonprofits commonly lose track of stock donors over time—more on this pitfall below.)

Keep these tips in mind:

  • Ask outright if donors own stock, have given gifts of stock previously, and are interested in learning more about this form of giving. 
  • Ask other questions that help point your research in the right direction. You likely wouldn’t ask donors to sort themselves by net worth, but you can ask questions that indicate capacity and propensity, like whether they’ve donated to political campaigns or served as a Director or Trustee of another nonprofit.
  • Use your responses to identify any immediate prospects, and then supplement all of your findings with what you already know or can find out—giving histories, philanthropic and wealth insights gathered through previous research, etc. 

Who should you send these surveys to? For nonprofits with established major giving programs, focus on your major donors and existing prospects. Smaller shops can easily survey their entire donor bases to cast a wide net. Consider demographics as you create and send your surveys, as well. College-educated Baby Boomers and Millennials are the most likely to own stock now and in the coming years.

Step 2: Create stock giving personas.

Distill the patterns revealed in your survey results and existing data into one or more personas, or profiles of ideal stock donors. These outline the key characteristics that best indicate a prospect’s likelihood to donate stock to you.

Stock ownership and high net worth are the most important indicators, followed by philanthropic indicators. The specific mix of indicators you use will vary, although demographics will generally fall into the ranges discussed above. Prospect profiles are typically comprised of three to five indicators—keep them specific enough to be helpful, but not so specific that they’re limiting.

Why is this a valuable step? Profiles anchor and guide your prospecting by giving you a starting point. They make it easier to quickly filter your data and head in the right direction when seeking or researching new prospects.

Step 3: Segment your donors based on what you’ve learned.

Next, segment your database of donors based on the personas. As you sort your donors and prospects into these groups (or disqualify them from the process for now), roughly prioritize them according to how well they fit the persona. Ongoing research and qualification will help you refine your personas over time.

With your first prospect lists in hand, start reaching out! One-on-one calls, meetings, and educational email streams that discuss the benefits of stock giving are all good first steps. Scale the time needed for outreach to the potential value of the prospect, just as you would for major gift development.

This is also when you’ll need to make sure your website and educational collateral are ready to help you promote and facilitate stock giving. You’ll need a dedicated web page, clear instructions, and an online tool that allows you to collect information about incoming stock gifts.

Step 4: Keep the conversations going.

As you work your way down your prospect lists, start typical fundraising cadences like you would for major gifts of cash—reaching out frequently, presenting cases for support, and more, but tailored to the unique process and benefits of stock giving.

Your pipeline should now be coming to life. As it does, confirm that your data entry and hygiene practices are working well. Data hygiene is critically important for any prospecting, development, or stewardship program. It not only ensures you’re working with truly helpful data but also aids with qualification, allowing you to solicit gifts of stock from those prospects most likely to give at any given time.

Sourcing new prospects is another key part of the process. Frequently screen your database for new or previous donors who fit into your stock giving personas. Ask for referrals to incorporate into your pipeline. Board members and existing major donors may be able to put you in touch with new potential donors who already have a built-in connection to your cause.

Step 5: Maintain your stock giving pipeline

Again, ongoing prospect qualification is key to the success of your new stock giving program. Continue verifying information on an ongoing basis as you learn more about donors’ interest levels in stock giving, its relevance to them, their connections to your cause, and more. 

And as patterns emerge over time, stay agile by using them to improve your program. Adjust your personas or develop new ones. Tweak your case for support and other program materials as needed.

Clear ownership is also essential for long-term success. Who is in charge of your stock giving program and tracking its performance? Who will own the individual donor relationships? If you’re not using the right tools and following clearly-defined processes, stock gifts can easily go unnoticed or unreported to the right people—which brings us to a key pitfall to be aware of from the outset.

One Common Pitfall to Avoid

The traditional way that nonprofits accept stock donations is by publishing their DTC (Depository Trust Company) information and clearing number. Interested donors use this information to initiate the donation process themselves by providing it to their stock brokers. The nonprofit then waits to receive the donated stocks (assuming the donor notified them of the gift). This approach has one major shortcoming:

Providing your DTC info with no wall or lead capture in place means you’ll lose the ability to actively steward those donors since gifts received this way are often anonymously reported. If a donor doesn’t tell you they’re donating stock (or tells the wrong person in your organization), you may have no way to follow up with them.

If stock giving isn’t given the structure and data collection process it needs, stock gifts can very easily get lost in the shuffle, meaning donors won’t be thanked and you’ll miss opportunities to further steward your relationships with them. 

Remember that stock donors can become recurring donors, and giving out of non-cash assets often makes them give more generously. This is one reason why planned giving is such a valuable investment for nonprofits, as well. Building stronger connections with individuals eager to give in different ways should be a top priority!

Of course, you still need to publish your DTC information so that donors’ brokers can process the transaction, but be more intentional than simply posting it on your website. Instead, create a standardized process in which stock donors first provide you with basic information about themselves and the gift before being directed to the necessary routing information. 

The right tools make it easy to collect this information and begin actively tracking and stewarding stock donations just like other gifts. 

Covering this essential step and following the others described above will help you build a robust pipeline that fuels growth and deepens relationships with donors.
 

patrick schmittPatrick Schmitt is co-CEO of FreeWill, which he and fellow FreeWill co-CEO Jenny Xia founded at Stanford University’s Graduate School of Business in 2016. FreeWill’s charitable giving platform makes it easier for nonprofit fundraising teams to unlock transformational gifts, and to date has generated over $6.6 billion in new gift commitments for thousands of nonprofit organizations. Patrick hosts FreeWill’s popular webinar series, educating thousands of nonprofit fundraising professionals each month about planned and non-cash giving strategies.

Before FreeWill, Patrick was the Head of Innovation at Change.org, where he helped grow the organization to 100 million users in four years. Prior to that, he ran email marketing for President Obama and served as Campaign Director for MoveOn.org.
 

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