NonCash may be the New King

Posted on Mar 25, 2019 by Jon Dize - Funding the Mission

Last week I wrote on the need for churches and schools to have ways to accept bank cards.

Next, let’s talk “noncash” gifts, such as stocks and mutual funds. For donation information like this, I go to the research of people like Professor Russell James, J.D., Ph.D, CFP, director of graduate studies in Charitable Financial Planning and holds the CH Foundation Chair in Personal Financial Planning at Texas Tech University.

James published a full technical paper on the subject, and you can find the Executive Summary here: “Cash is Not King in Fundraising: Results from 1 Million Nonprofit Tax Returns”. Among his findings are the following:

Nonprofits who only accept cash (checks, etc.) grew donations on average 11% over the five years of the study, barely keeping up with total inflation of 8%. In contrast, those reporting accepting noncash gifts (like stocks, mutual funds, etc.) grew their total contributions, on average, 50% over the same five-year period.

Although the main study used 2010-2015 data, the study found similar results when inspecting other year spans.

Also in the study, James notes that when cash donations decreased for a charity in relation to their noncash gifts, total giving grew...and grew “dramatically”. What does that mean? Noncash gifts tend to be larger than cash gifts.

What? It’s a mental thing.

First, the study notes that wealth is no longer just held in forms of cash. Estimates from the census bureau suggest that only about 3% of household wealth is held in cash and checking accounts. When organizations ask for cash donations, they are asking from the “small bucket.” The same gift may seem large when compared to other checkbook purchases, but small when compared with total wealth (other noncash assets). Donors who have never made a gift from assets may simply never have considered, or been asked, to give from wealth rather than from spare income.

Gifts of appreciated assets can also be cheaper than gifts of cash because the donor can avoid capital gains taxes. This special benefit is particularly important under the new tax law, because it applies to all donors, even non-itemizers who can’t use charitable deductions as in the past.

Raising gifts of noncash assets is not always as simple as asking for a check. The rules for documenting, valuing, and deducting such gifts are different. The organization will also need a way to promote and receive noncash gifts. But, as the study notes, the process is much easier than it was in the past and both professional and free assistance abound, online and elsewhere, including our friends at the LCMS Foundation.

As I noted last week, there is nothing wrong with accepting checks; many people still use them. But ignoring the rising popularity of gifts from noncash sources and not adding them to the donation acceptance mix could hinder future success. Efforts now should be well-rewarded in the long-term as more sophisticated donors catch the Lutheran Spirit.

Need help navigating the options? Feel free to call us at 260-203-4500 or email at Or have your financial advisor call.