Gifts of Marketable Securities

These procedures have been designed to ensure that gifts of marketable securities will be processed efficiently and adhere to donor wishes and foundation policies. The responsibilities and procedures for Development Officers, the Foundations Accounting and Investments department (FAI) and Advancement Services’ Office of Gift Processing are set forth in this document.

DEVELOPMENT OFFICERS

The development officer should be the first person in contact with a donor who intends to make a gift of marketable securities. Responsibilities of this officer are as follows:

A. Advise the donor to seek advice from a tax consultant.
B. Assist the donor in the transfer of securities by using one or more of the following methods:

1. Electronic Transfer 
Securities may be wire transferred from a donor’s account to a foundation brokerage account. This is the simplest method of transfer and requires the least amount of paperwork. If securities are to be transferred in this manner, the development officer should provide the donor with:

a. Name of the foundation’s broker
b. Foundation’s account number with the broker
c. Broker’s Depositors Trust Company (DTC) number

2. Physical Transfer 

a. Certificate Of Endorsement
If the security certificate is registered in the name of the donor, ownership may be transferred to the recipient foundation by having the donor endorse the back of the certificate. This endorsement must be exactly the same as the registration on the front of the certificate.

b. Letter of Authorization Form or Personal Letter of Intent
Either a completed Letter of Authorization Form* or a personal letter of intent must accompany the certificate. A personal letter of intent must contain the following information:

  1. Name of foundation and fund to which the donor is giving the stock
  2. Name of security and number of shares or face value
  3. Any donor restrictions
  4. Signature of all owners as reflected on the certificate
  5. Date the letter was signed

Note: It is important that all named owners (names which appear on the front of the certificate) sign either the authorization form or letter of intent.

* (Contact FAI @ 513-7149 or Gift Planning @ 515-9076 for a Letter of Authorization Form)

c. Reissuing Security in Foundation Name
A security may be conveyed to a foundation by having the certificate reissued in the foundation’s name. It is important for the legal name of the foundation to be used.

d. Security Held by a Mutual Fund
The mutual fund should be contacted directly for its specific requirements and forms necessary to transfer shares to the foundation and subsequent sale of fund share by the foundation.

C. Notify Office of Planned Giving the security gift by using a Gift of Securities Transmittal form. The following information is needed:

  1. Name of security and number of shares or face value
  2. Name of donor
  3. Method of security transfer (See B above for the options)
  4. Name of foundation and fund within the foundation to receive the gift
  5. Any donor restrictions
  6. Anticipated delivery date of security either electronically to a broker or physically to Foundations Accounting and Investments

OFFICE OF PLANNED GIVING (OPG)

Following receipt of a Gift of Securities Transmittal from the development officer, will arrange for processing the security with the appropriate broker and for completing its section of the transmittal and forwarding it to Advancement Services’ Office of Gift Processing.

The security processing procedure depends on the manner by which the donor conveyed the stock to the foundation.

A. Electronic Transfer
1. Following notification from the development officer of an impending security gift, OPG will advise the receiving broker and arrange for monitoring the foundation brokerage account to which the gift will be wired. The broker should be provided with:

a. Name of security and number of shares or face value
b. Name of the donor
c. Name of the wiring brokerage firm

2. Upon receipt of the security by the broker, FAI will authorize an immediate sale or arrange for continued safekeeping if such sale has been restricted or prohibited. (FAI office serves as backup in absence of Planned Giving Office.)

B. Certificate Endorsement, Letter of Authorization, Personal Letter of Intent or Reissuing Security in Foundation Name

Following receipt of a security certificate:

  1. OPG will notify the brokerage firm of the security name, number of shares or face value, CUSIP number and authorize a sale unless such sale has been restricted or prohibited.
  2. The security certificate must be delivered to the broker within (3) business days after the broker has sold the security.

C. Upon receipt of a check for the net sales proceeds, OPG will record the net receipt on the Gift of Securities Transmittal received from the development officer and forward it with the brokerage check and a copy to Advancement Services’ Gift Processing Office. This form should be placed in an envelope separate from any other gift transaction or unrelated correspondence. These envelopes are to be clearly marked “STOCK” and placed in the box marked “Stock Transactions” in the Office of Gift Processing.

ADVANCEMENT SERVICES’ OFFICE OF GIFT PROCESSING

Upon receipt of the Gift of Securities Transmittal from OPG and check from the sale of a security, Gift Processing will:

A. Obtain a value based on the average of the Hi/Lo price of the security on the date ownership was relinquished multiplied by the number of shares or face value.

For a wired security, the date of the gift is the date the security is transferred into the foundation’s account or name. If a new stock certificate is issued, it is the date on the certificate.

B. 
Generate a receipt for the donor using the value computed in Item (A).
C. Enter the amount of the net proceeds into the ADVANCE system.
D. Enter the amount of any excess of the value computed in Item (A) over the net proceeds as a soft credit into the ADVANCE system.

* Note: If the net proceeds exceeds the value computed in Item (A), no entry is required.

E. Return the original check to FAI for bank deposit.