Nonprofit Brokerage Account: A Comprehensive Overview for Nonprofits

A nonprofit brokerage account can be a game-changer for organizations looking to grow their assets and achieve their financial goals. Nonprofits can use a brokerage account to invest excess funds in a variety of assets, such as stocks, bonds, and mutual funds.

Nonprofits can use a brokerage account to invest excess funds in a variety of assets, such as stocks, bonds, and mutual funds. This can help them earn higher returns on their investments and grow their assets over time.

One key benefit of a nonprofit brokerage account is that it allows organizations to diversify their investments and reduce their risk. By spreading their investments across different asset classes, nonprofits can minimize their exposure to any one particular market or economic downturn.

Nonprofits can also use a brokerage account to save for long-term goals, such as building an endowment or funding a major project. By setting aside a portion of their excess funds each year, nonprofits can build a significant reserve over time and achieve their goals.

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Accepting stock donations can be a game-changer for nonprofits, and it's easier than you think. You'll need to gather some essential tools and resources to launch your stock fundraising program.

To make the process smoother for your donors, you'll want to provide them with charitable gift transfer or letter of authorization forms from their stock brokers, which are usually available online. You'll also need to share your nonprofit's brokerage information with them.

There are three types of stock that can be donated to nonprofits: publicly-traded stocks, privately-held stocks, and mutual funds. Publicly-traded stocks are the most frequently donated non-cash assets because they're widely owned and have publicly known prices.

To make the experience even more seamless, consider using a dedicated stock giving tool or directing users to an instruction page that provides next steps. This will help you automate the process and ensure that donors receive the necessary information to complete the transaction.

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Here's a 4-step process to make accepting stock gifts more intentional and secure:

1. Automatically send donors the transfer instructions for their brokerage.

2. Direct users to an instruction page or a dedicated stock giving tool.

3. Notify you of the gift and its details for record-keeping and stewardship purposes.

4. Send donors receipts for their gifts and messages of thanks.

By accepting stock donations, nonprofits can tap into a huge pool of potential donation revenue – the US Census estimates that 97-99% of wealth is held in non-cash assets.

Accepting stock for nonprofits can be a game-changer, unlocking generosity from donors who might otherwise feel hesitant to give a major gift.

Gifts of stock are often larger than cash gifts, and they represent a huge pool of potential donation revenue. The US Census estimates that 97-99% of wealth is held in non-cash assets.

Encouraging gifts of stock can lead to revenue growth, with nonprofits that actively encourage and accept non-cash assets displaying revenue growth 66% higher than those that only accept gifts of cash.

Donors are often more willing to give out of their wealth, or unearned gains on investments, than out of pocket, or their disposable income.

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When opening a nonprofit brokerage account, you'll encounter various types of stocks and fees to consider.

Common types of stocks include individual stocks, exchange-traded funds (ETFs), and mutual funds.

Individual stocks allow you to own a portion of a specific company, while ETFs and mutual funds provide a diversified portfolio of stocks.

Fees to be aware of include management fees, trading fees, and maintenance fees.

Management fees are charged by the brokerage firm for managing your account, while trading fees are charged for buying and selling stocks.

Maintenance fees are charged for keeping your account active and in good standing.

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There are three main types of stocks that can be donated to nonprofits: publicly-traded stocks, privately-held stocks, and mutual funds.

Publicly-traded stocks are the most frequently donated non-cash assets because they have publicly known prices.

Privately-held stocks, on the other hand, often have significantly higher values but require independent appraisals to determine their fair market dollar values.

Mutual funds are a popular option among everyday traders and investors, and they're a type of risk-mitigating bundled stock.

Here are the three types of stocks that can be donated to nonprofits in a concise list:

Asset management fees are a crucial aspect to consider for nonprofits, which are typically organized under Section 501(c)(3) and exempt from most federal taxes.

For nonprofits with accounts under $100,000, asset management fees can range from 0.90% annually. This fee structure is designed to accommodate smaller organizations with limited assets.

Nonprofits with accounts between $100,000 and $1,000,000 can expect to pay 0.65% in asset management fees, a more moderate rate for organizations with growing assets.

For nonprofits with accounts between $1,000,000 and $3,000,000, the asset management fee drops to 0.40%, a lower rate for larger organizations with established assets.

Asset management fees for nonprofits with accounts above $3,000,000 can be as low as 0.25% annually, a significantly lower rate for well-established organizations with substantial assets.

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Having a nonprofit brokerage account can be a game-changer for organizations looking to grow and become more sustainable.

Non-profits can use an investment portfolio to help them grow, especially when paired with other growth measures like fundraising. This can help the organization become more operationally viable and sustainable in the long term.

Non-profit organizations can work with investment management solutions that are specifically designed for steady long-term growth with downside protection. This means that the portfolio will be constructed based on the organization's unique needs and goals.

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Having a well-managed investment portfolio can help non-profit organizations grow and become more sustainable.

Non-profits can utilize an investment portfolio to help them grow, when used in tandem with other growth measures.

A key benefit of an investment portfolio for non-profits is that it can help the organization edge closer to long-term operational viability and sustainability.

Investing wisely can also provide a steady stream of income for non-profits, allowing them to focus on their mission and goals.

By diversifying their investments, non-profits can reduce their financial risk and increase their chances of long-term success.

This can be especially important for non-profits that rely heavily on donations or grants, as an investment portfolio can provide a cushion against fluctuations in funding.

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Sustainvest brings years of dedication, experience, and passion to their work with mission-driven organizations. They work with multiple 501c3 organizations to align their assets and endowments with their Investment Policy Statement (IPS).

Understanding the investment goal, risk tolerance, and time horizon is key to creating a suitable investment framework. This involves working with executive directors, board members, and financial committees.

Nonprofit investment management solutions are designed for steady long-term growth with downside protection. Portfolios are constructed based on the specific needs of each organization and impact profile.

Sustainvest can align the mission of the non-profit with its investments. For example, they can put higher allocations into strong gender diversity firms and funds for organizations focused on human rights.

They can also exclude tobacco companies for non-profits focused on public health. Some non-profits Sustainvest manages endowments for include organizations with a mission to promote human rights and public health.

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To make the process of accepting stock gifts smoother for your donors, start by getting the necessary information from their stock brokers. This typically involves obtaining charitable gift transfer or letter of authorization forms, which are often available online.

To make the process even more efficient, you'll also need to provide your nonprofit's brokerage information to your donors. This includes the details you need to share to enable the transaction.

To minimize the friction in the process, consider having a clear and easy-to-follow process in place for your donors to follow. This will help them navigate the steps required to make a stock gift more easily.

To facilitate this, you can provide a list of the required information and forms to your donors, along with a clear explanation of the next steps they need to take. This will help ensure that everyone knows what to expect and can plan accordingly.

Here are the key pieces of information you'll need to share with your donors: