Securities are a growing donation trend. Our research in the recent Giving Report showed that the value of securities donated in 2024, was over $57.6 million, that’s a 5x increase since 2018. This is a great opportunity for charities to tap into. Learn why charities should be making the most of this trend and how you could start accepting donations of securities today.
This blog has been adapted from our webinar Securities Made Simple: A Guide for Charities of All Sizes, with some additional perspectives shared by Jenn Graves, Manager of Major Gifts and Planned Giving, who has been running a successful securities donations program at Ottawa Food Bank.
What are donations of securities?
Securities are investment assets such as stocks, bonds, and mutual funds that are publicly traded.
When donating a gift of securities, instead of selling the securities and donating the proceeds, the donor transfers ownership of the securities to the charity.
Why promote securities donations?
1. It’s a growing trend
As mentioned in the introduction, the value of securities donations have grown 5x since 2018. To put this into context, that’s the same level of growth as donations given on GivingTuesday. That’s a much more visible trend with many charities celebrating and participating in this worldwide movement. Both of these trends have seen a 5x increase but fewer charities are actively providing options for securities donations than participating in GivingTuesday.
The growth in securities giving is particularly significant when we see that overall donations in the same time period have only increased by 7%.
2. Donations of securities are often larger
When people are able, or are particularly moved by a cause, they often do make large donations. There has been a general shift in donation behaviour, even beyond securities, that sees a smaller donor base, making more generous donations.
Looking at CanadaHelps data, we see that the average securities donation in the last 2 fiscal years has been $7815.
This year has been particularly good for the stock market. Despite an uncertain outlook at the start and the downturn in April due to tariff announcements, there has been a strong recovery and record highs across many indices through to today. There are likely some potential supporters that have benefited from this bull market and are looking to protect their capital gains while making a statement.
3. Win-Win Donor Tax Advantages
The reason that people donate more when gifting securities can be because of the tax advantages, and this results in a win-win for donors and your charity.
In the example in the table, a supporter originally invested $1000 which has appreciated to $5000 resulting in capital gains of $4000. If they were to sell the securities for cash, they would be taxed $920 and only be able to donate $4080. They would be given a charitable tax credit of $1876.00.
If they were to donate securities directly, even accounting for any fees, the Donor would have gained a tax credit that would be $424 larger and your charity would have received $920 more.
So to recap, donors avoid capital gains taxes by donating securities directly. This results in a larger tax receipt and maximized contributions for charities.
Some things to keep in mind for tax purposes include:
- Donation tax credit – There’s a Federal tax credit of 15% on first $200, If not in highest tax bracket, 29% of anything over $200 If in highest tax bracket, 30% – 50% tax credit that varies by province/territory
- There is no limit for donations of securities (besides the amount you can claim – You can only claim a donation of up to 75% of your net income in a taxation year, Limit is 100% in Quebec, Limit is 100% in year of death and the preceding year
4. Cost-Effective for Charities
Securities are typically more cost-effective for charities. Compared to the processing fees for cash donations, they come with a lower processing fee. That’s true of many different donation platforms and the fees for CanadaHelps can be seen here.
We are always transparent with our fees and there’s no additional fees.
Being able to accept these types of larger gifts can also make it easier for your fundraising team to work more efficiently and raise more funds with fewer donors.
5. Appeal to a different donor base
It’s really important to diversify your donor base. Securities donations help you to appeal to segments you might not have focused before.
They can be a talking point for your “High-Net-Worth Donors”. If they are ready to give, they are likely looking to maximize their impact in a tax efficient way.
Surprisingly, they could also be a way to appeal to Canada’s young donors. Investing has become markedly more accessible and democratized through advancements like new investment vehicles (e.g. ETFS), fractional ownership and user friendly investment platforms. Research by FINRA shows that Canada has the highest rate of Gen Z investors, with nearly 74% reporting they have at least one type of investment. We shouldn’t underestimate the savviness of younger supporters and it is never too early to begin educating them on the benefits of security gifts.
6. Immediate access to funds
They share the best of both worlds, in terms of being larger gifts like planned giving, and immediate impact like traditional cash donations. Once gifted securities are received they can be sold and used immediately.
How can CanadaHelps help you accept security donations today?
CanadaHelps handles the selling of the securities and all administrative aspects of the donation.
If your charity were to accept gifts of securities directly from donors, you would need to engage with brokers, sell the securities on the market, and issue a charitable tax receipt. This can be time-consuming and requires additional in-house expertise.
CanadaHelps Securities Donation Form is the easiest way to start accepting securities donations today:
- Let us handle the logistics of processing donations of securities
- No need to set up any new brokerage accounts – receive security donations directly in your charity’s bank account.
- No learning curve for your organization on how to handle the sales of securities or issue CRA-compliant tax receipts for securities donations – we handle it all and keep the donor informed at every step.
- No hidden fees or additional costs; securities donations are processed for a fee of 2-3% depending on the size of the donation. This includes all services and associated fees.
- Bilingual support for your donors and your organization
- Control what the securities donation experience looks like for your donors with similar branding and customization capabilities as our popular online donation forms
Tour the securities donation form setup yourself, by logging into your account.
If you don’t have the time to set up your own branded, embedded form, you can also direct donors to our general securities donation form, where donors can donate securities to any charity that has banking information set-up with us.
How can you promote securities donations?
1. Educate donors and staff
The starting point of fundraising is education. Emphasize the benefits that are covered in this blog. You can lean on resources that CanadaHelps has already developed like our “Donate securities page” and the “Donate Securities Webinar, for donors”.
Don’t forget to also get everyone on your team on the same page. Equip your fundraising staff with securities talking points and even one pagers so they have it to hand when there’s a prospect.
You can also develop your own materials for donors in terms of webpages with handy FAQs, pamphlets and PDFs.
Jenn shares that something they did at Ottawa Food Bank was provide information resources when the Canadian Government announced changes in taxes. They explained to donors how some of those changes might affect them and their giving, which also opened the door to opportunities to talk about gifts of securities.
2. Add it to your ways to give page
This one might seem so simple, it barely seems like a tip. But upon reaching out to one of CanadaHelps’ charity partners that were most successful at securities donations they explained that they hadn’t done anything in particular other than provide the opportunity to their donors and didn’t feel like they had much to share. This is a charity that has received over 32 security gifts and 400,000 in securities so far! So, I think we can learn something there. For some charities, simply providing the opportunity is enough.
Many charities, particularly those in categories like Food Banks, Hospices and Health Foundations, are successful with securities donations just because of the nature of their work and donor base.
If you want to go the extra mile, create a dedicated page for securities fundraising and provide the rundown of how securities donations work at your charity and what they enable you to do.
3. Look among your existing donor base
Securities might not be the right type of gift for all segments of your donors but it could be just right for your high value donors that are looking to maximize their impact without necessarily increasing their gift. Writing them a tailored message thanking them for their gift and letting them know how to make it go further could be a great strategy.
Sometimes, it’s also about “potential”. If someone has provided your charity with small consistent gifts over time, they are likely invested in your cause and may be open to increasing their impact in a different way.
Jenn shared that they most commonly reach out to those that have given securities in the past and also those that have given above $7500 in total. These are not huge donor lists, with roughly 450 people falling in these categories – which shows that securities donations can be a very resource efficient way to raise funds.
4. Incorporate it into your Legacy Giving Program
A great place to build in messaging around securities gifts is a legacy giving program. These are people that are already highly invested in your charity and looking to make an impact. Explain that they can make an immediate impact and receive tax benefits sooner.
Ottawa Food Bank has leveraged the “Leave A Legacy” awareness month, a national initiative that takes place every May, to encourage individuals to consider making a charitable gift. Aside from asking individuals to consider a gift through their will, they tied in messaging around securities donations and ways to give outside of their will. This has helped to create an uptick in securities donations for them beyond the end-of-year.
5. Ask in the lead up to Year-End
Lead up to the year-end is a busy time for most charities. It is also a great time to talk about gifts of securities as this is when tax-incentives are top of mind and people are thinking about getting their ducks in a row before tax filing season. Because securities take some time to process it is helpful to start earlier rather than later to ensure things are “settled” before the year-end.
We hope this article has shown you the possibilities of getting started with securities donations and how CanadaHelps can make that process accessible without additional expertise. Check out securities donations forms for yourself by logging into your CanadaHelps account now.