FundSvcs Community

Hi!

We have accepted privately held stock. In our system (RE 7/NXT) we entered it as a stock gift with the addition that we included what Raiser's Edge refers to as a gift subtype of closely held stock. This enables the gift to post to the GL in Financial Edge and moves the "cash" into a specially designated fund within our Finance Department, so that they may track it. (As the stock may never be sold!) I attached our SOP, which is still in development, and only refers to gift entry, not receipting.

As several on this ListServ have mentioned before, the amount of shares, transfer date, and issuer may be stated in the receipt, but no value. You can likely find these topics in the archives, but I'm sure others will pipe in!

Hi!

We have accepted privately held stock. In our system (RE 7/NXT) we entered it as a stock gift with the addition that we included what Raiser's Edge refers to as a gift subtype of closely held stock. This enables the gift to post to the GL in Financial Edge and moves the "cash" into a specially designated fund within our Finance Department, so that they may track it. (As the stock may never be sold!) I attached our SOP, which is still in development, and only refers to gift entry, not receipting.

As several on this ListServ have mentioned before, the amount of shares, transfer date, and issuer may be stated in the receipt, but no value. You can likely find these topics in the archives, but I'm sure others will pipe in!

Hi!

We use the appraised value determined by most recent audit of the donor's company multiplied by the shares given in the donor's gift agreement. The agreement only references stock shares and no gift value. We maintain both financials in our records.

We report the total gift amount (input for our own internal purposes) to external stakeholders such as the board, but receipted the donor only with a description of the amount of shares and issuer.  

Our Gift Acceptance Committee, on the board, reviews gifts at this level due to the complexity, but we do not have a "sell by date." (We are assuming the risk for this donation.) Each donation of closely held stock might not be approved, due to the risk assessment by this committee. As we use the gift subtype and therefore use the GL linking in Raiser's Edge, Finance moves the revenue from Raiser's Edge into a special fund in Financial Edge due to the fact we may never see the revenue. This fund holds the shares and the Finance Manager is able to record value changes for accounting reporting.

When we sell, the revenue will go into "Stock Sold" into Raiser's Edge. The Finance Manager will then be able to move the money into one of our common accounts. He will see both amount transferred and sold, as well as fees associated. (Finance magic will come into play as he accounts for depreciated value!)

-Hillary

Hi!

We have accepted privately held stock. In our system (RE 7/NXT) we entered it as a stock gift with the addition that we included what Raiser's Edge refers to as a gift subtype of closely held stock. This enables the gift to post to the GL in Financial Edge and moves the "cash" into a specially designated fund within our Finance Department, so that they may track it. (As the stock may never be sold!) I attached our SOP, which is still in development, and only refers to gift entry, not receipting.

As several on this ListServ have mentioned before, the amount of shares, transfer date, and issuer may be stated in the receipt, but no value. You can likely find these topics in the archives, but I'm sure others will pipe in!

Haven't had gift acceptance on my plate for a while now, but I saw a few back in the day and some of the some possible issues may persist.

One set of issues is around the value and the ability to transact the stock.  So, are there recent sales or is there a recent appraisal, is the donor restricting your ability to sell, are there willing buyers (other than the donor).  In one case that I looked at back in the day, there was a recent appraisal that we were provided, the donor was not restricting our ability to sell, and the company itself would be willing to buy the stock at the appraised price, so we accepted the gift.  Any arrangement where the donor requires that you sell the shares back to the donor is a big red flag.

I was never really sure how common this was, but the thought at the time was that there was a possible scam where the company and its stock had no real value, but there was an apparently-legitimate appraisal and then a series of gifts with different nonprofits where the nonprofit would receive the gift and then sell it back at the appraised price, all apparently aboveboard.  But then that transaction history would be used to establish the stock price, which the scammer would use to sell essentially worthless shares to investors.  So, at the time, we did due diligence about the company, how long it's been around, whether there had been any recent setbacks or change of ownership or change of leadership or loss of contracts or anything like that, to establish that the company was a legitimate going concern.  In the case I'm thinking of, it was a well-established privately-held company, with ongoing leadership and ownership and ongoing government contracts, and even a long history of making such gifts of the closely-held stock, so it all checked out and we did accept the gift.