Case Studies

RIP Medical Debt, a New York based, national nonprofit, is making sure people aren't forced to choose between good health or financial stability. Here's how they work:

When debts go unpaid, some hospitals and doctors sell them to collections companies. These companies buy up the debt for a fraction of its face value, yet attempt to recoup the full cost. RIP Medical Debt saw a way to leverage this issue for the benefit of the patient.

Fueled by charitable donations, RIP Medical Debt buys existing medical debt on the secondary debt market at a huge discount. They abolish the debt completely, and then send out letters to people informing them their debt has been completely wiped out. In fact, they've wiped out nearly $7 billion dollars in medical debt to date.

On the RIP Medical Debt website, you can scroll through a handful of personal stories of people expressing their immense gratitude for this service. As one couple put it: "we almost cried when we realized the letter was real."

Given that RIP Medical Debt is funded by donations, they wanted to maximize their giving intake so they could in turn maximize their impact. When Scott Patton, VP of Development at RIP Medical Debt, met Overflow CEO Vance Roush, he was intrigued at the possibility of implementing a more streamlined, accessible system.

"Vance was involved with our organization as a donor through his church. I liked what he was doing, and he basically was addressing the issues that we had. I felt like Overflow was solving most of the problems. So I was more than happy to sign up early and give it a shot."

Though the process and partnership is still emerging, the considerable amount of stock donations that have come in through Overflow has not only made Overflow pay for itself, but helped further RIP Medical Debt's mission to be a "force for systemic change."

The Process

Historically, making donations via stock has not been an easy process. It involves back and forth contact with the nonprofit, the brokerage, and the donor. The unnecessary extra steps only lead to more frustration and precious time spent.

Oftentimes donors want to give but aren't sure how to initiate a transaction or how the overall process works. The more resistance and confusion, the less likely it is people will give, or feel confident in their giving. As Patton said:

"We had donors. I mean, I would have half a dozen inquiries [saying] ‘hey, where can I send this or make these stock donations?’ I would say that it was marked first by being under-resourced from a time perspective and then being under-resourced from a communications and transparency perspective."

Once the partnership with Overflow was forged, Patton and his team set out to inform people about this new service. However, he was careful to communicate this new tool without overwhelming or confusing the organization's donor base. Thus, the marketing aspect has been mostly digital, as it provides a quicker follow-up for people to ask questions and get informed.

"We use digital [communication], because we can send a series of follow ups and include Overflow. I want to remind donors about the benefits of stock giving," Patton said.

As with any new system, the process for rolling it out has been trial and error. Patton noted that it's a tricky line between featuring Overflow and featuring their mission. That said, there are plans to continue refining the marketing process, such as utilizing tools like Facebook Live to inform about the power of giving non-cash assets like stock.

The Results?

Though the marketing process is still being shaped and refined, it's evident that the results have spoken for themselves. While more "traditional" givers (who tend to give large stock donations) have been hesitant to stray from the way they've always given stock, statistics show that an overwhelming amount have been receptive to the new option.

Per Patton, over 70% of donors are giving through Overflow. And the average donation is $16,000, which is nearly 50% more than the average donation made through Overflow (~$9,000). These large stock gifts have helped further RIP Medical Debt's mission of knocking out big chunks of medical debt while keeping their organization running smoothly.

In describing the partnership, Patton noted that "overall it's been really good…ultimately we felt like this was more than paying for itself."

To date, RIP Medical Debt has gotten an 18x return on their initial investment in the Overflow platform.

And from the customer service side of things, Patton and his team have appreciated Overflow's adaptability, as well as the commitment to making it about a healthy relationship and partnership. Despite some initial road bumps and smoothening those out, both sides have stayed in consistent communication to ensure both present and future needs are addressed.

As always, the goal is to add value, not only on a monetary level, but a personal one as well.

"I really like Vance a lot. And Claire has been great, so I feel like [Overflow] is a valuable partner," Patton said.

Case Study: RIP Medical Debt

Investing

The world watched in both terror and shock as Russia began its invasion of Ukraine in late February. From a humanitarian standpoint, millions of Ukrainians have fled to neighboring countries, and many civilians have died in the fighting . Many are grappling with the tragic consequences of this invasion and how it will impact their families, livelihoods, and futures.

In turn, global markets are reacting in different directions, with investors scrambling to keep up and discern what ramifications the situation will have. As the old adage goes, the stock market is driven by fear and greed, and we will see that continue to ring true this year.

That said, there are a few silver linings: the economy continues to recover from COVID-19, supply chains are improving, and the discussions about new energy sources have ramped up. And from a stock market perspective, March ended up better than expected despite everything going on. However, looming interest rate rises and inflation have thrown in some wild cards to the pile.

What could the second quarter look like for the stock market?

Prediction 1: Uncertainty in Ukraine will play an impact

Russia and Ukraine are two of the world's largest exporters when it comes to wheat, vegetable oils, and other grains, per a recent Washington Post article. Given everything going on, there's no realistic timeline for when things will "normalize," leading many to fear the impact on food manufacturing costs.

In the same article, Katie Denis, VP of Communication and Research for the Consumer Brands Association, said wheat and corn, two primary components of the American diet, will be impacted at levels not seen since the start of the pandemic.

"We’re already seeing energy prices rise and commodities futures for wheat and corn spike. That’s going to prompt concern when costs to make and ship goods continue to set records and consumer demand continues to be above levels not seen since March 2020,” she said to the Washington Post.

The main reason we'll see a chain reaction economically is that the U.S. and other major countries' response to Russia has been economic sanctions on Russian goods, commodities, and financial institutions in an effort to deter Russian leader Vladimir Putin. As it stands today, the U.S. has not targeted Russia's energy sector with sanctions. As Daleep Singh, White House economic advisor, put it at a recent press briefing: "we're not going to do anything which causes an unintended disruption to the flow of energy, as the global economic recovery is still underway."

Russia currently clocks in as the world's third largest exporter of oil, and is also a major producer of natural gas. However, there's still been corporate and social backlash, such as BP withdrawing its $14 billion stake in Russia oil giant Rosneft.

Still, Brent Crude Oil has risen to $100 a barrel as of early April– something we haven't seen since 2014. For reference, the price was $65 as recently as this past December 2021.

This has already had a major impact at the gas pump, as gas prices hover around $4.11 on average,, and even upwards of $6.00 in Los Angeles. How will that affect something like energy based stocks?

Energy prices, and therefore many energy-related stocks, are rising due to a low supply and high demand. WTI Crude Oil, a benchmark for oil prices, sat at $99 a barrel as of April 4th.

Why is supply low? Aside from many Western nations severing their ties to Russian energy, there is also a lack of domestic oil being extracted here in the U.S. At the height of the pandemic, when far fewer people were traveling, oil prices plummeted and energy costs were extremely cheap. In response, energy companies weren't extracting more oil. Curiously, there doesn't seem to be a big push to reverse this trend.

As Paddy Hirsch of NPR put it, "with oil now brimming at a hundred bucks a barrel, you'd think these companies would be pumping like mad. And yet, they are not."

OPEC Plus, the international cartel for petroleum-exporting countries, has only pledged a modest increase in oil. Long story short, the big-time oil producers aren't exactly rapidly ramping up production, despite President Joe Biden ordering the largest ever release of the U.S. Oil Reserves. However, economists aren't sure how drastic of an impact this will make.

Oil prices dropped 13% last week, dropping gas prices a bit, but it's unclear how long Biden would seek to keep this pace of releasing the reserves.

As far as the conflict in Ukraine's impact on the stock market goes, we really can't gauge its full impact yet. Think of it like a rock hitting a glass window. At first you see a major dent, but slowly but surely more cracks begin to spider out from the original incident.

For instance, the SWIFT banking network is cutting off seven major Russian banks from its network. SWIFT, a Belgian messaging system, connects over 11,000 banking institutions. While this was intended to be a sanction from the international community against Russia, it should be noted that this could have a reciprocal effect on U.S. and other global banking systems as well.

George Washington University professor Scheherezade Rehamn outlined some of the "unintended consequences" on the global banking community:

"Commercial banks are going to get hurt from these sanctions because they are barred from doing business. So, yes, unintended consequences - slower growth, less business for U.S. banks and European banks, allowance of other systems to be put into place which are not entirely desirable, like the crypto market. And there are other consequences that we don't talk about very often," he said.

Prediction 2: Prepare for Volatility

If March showed us anything, it's that volatility may be a consistent thread over the next few months. After two straight "down" months, March ended up with a nice bounceback despite the aforementioned Ukraine crisis.

As the New York Times reported, "The S&P 500 rose 3.6 percent for the month, snapping back after stocks had plunged to start the year."

However, that momentum could be tapered by rising interest rates, thus potentially creating more ups and downs.

As we'll get to in the next section, the Fed is trying to combat inflation by raising interest rates nationally. This creates further economic uncertainty, as people generally tend to save more and spend less when rates rise. A recent article from JP Morgan Chase explained some of the implications of rising interest rates.

"The Fed wants to increase the cost of credit and make borrowing more expensive. This would discourage people from borrowing aggressively to pursue opportunities, such as buying a home."

But in the context of the stock market, there's not a black and white answer that says "rising interest rates will do…x." Predictively speaking, companies may be hesitant to take big risks because of the rising rates, and this could have a trickle down effect down to the company's shareholders.

In any case, be prepared for more wild swings in the market as opposed to the generally consistent performance of the stock market in 2021.

Prediction 3: Inflation will continue to rise impacting consumer decisions

Inflation's been a hot topic among investors, with several Wall Street outlets like Goldman Sachs fearing the inflation rate could reach levels not seen since the 1980s. The current inflation rate reached 7.5% this past January, per the Consumer Price Index.

As a reminder, inflation is essentially the decreasing value of a dollar due to increasing prices (gas, groceries, goods, etc.) in the economy. We've seen this in areas like the housing and auto markets, as limited supply has led to astronomically high prices and peoples' dollars not stretching as far as they did just a few years ago.

Here's an example: In 1995, a gallon of milk (a grocery store staple) cost an average of $2.48. However, in 2021, the same product cost an average of $3.55. That may not seem like a huge increase, but percentage-wise that's a 43% hike for something of equal value.

There are a variety of reasons for inflation, such as supply chains still recovering from the pandemic and the Fed raising interest rates, but the core question people are asking is this:

How will inflation affect the stock market?

There isn't really a simple answer. There have been conflicting research studies done about inflation's impact on the stock market, with some finding that it adversely affects it, and others pointing out that the overall effect is marginal. That said, the answer lies more in the middle.

There may be some short term volatility and uncertainty due to a rise in borrowing costs, but many experts speculate that businesses will try to shoulder the load before the burden falls to stockholders.

In an interview with Money.com, Ross Mayfield, an investment strategy analyst at Baird, said that "generally, the stock market has performed quite well over the past 40 to 50 years during periods of higher inflation."

And per Fisher Investments, the "shock factor" of inflation may not play as big of an effect as one might expect:

"Are inflation and steep rate hikes great? No. But neither one is automatically bearish. They also aren’t catching anyone off guard. Surprises are what move markets most over time. At this point, what negative scenarios are out there that markets haven’t already sorted through?," they said in a recent editorial.

While it can't be said definitively if inflation will have an inherently positive or negative effect, it will certainly make the state of the stock market less clear. And as mentioned before, it could temper big ambitions by companies, which in turn affects profit and overall growth.

"Inflation complicates the current investing landscape. It erodes the value of money that’s not invested, while rising interest rates will decrease the value of existing bond allocations, and various stock market sectors have taken a beating this year," said Forbes' Anna-Louise Jackson.

Stock Market Prediction 4: Gold and crypto will be used as short term safety nets

When panic hits, many people begin to stockpile and turn to more "reliable" sources. Think of a bear stocking up for winter hibernation. It knows that there will be a dry stretch without much sustenance, so it loads up in anticipation for what's to come.

For investors, gold is often that safety net or sustenance. Per CNBC, "Gold, often used as a safe-store of value during times of political and financial uncertainty, has risen about 6.5% in February, having soared to an 18-month high of $1,973.96 last week."

Why gold? Historically, it has been an asset that can retain or even increase in value despite chaos or uncertainty in the world. Gold is a tangible, precious metal and isn't valued based on the interest rate or fiscal policies of a government, unlike fiat (traditional) currency. Moreover, the fact that people pile their money into gold only drives up its value (due to rising demand).

These days, you don't have to be a miner with a pickax to acquire gold. There are gold ETFs (exchange traded funds), such as SPDR gold shares (GLD), currently up almost 6% this year. You can also either indirectly buy stock in gold mining companies and operations, or directly purchase certified gold bars, coins, and jewelry.

Though gold no longer backs the U.S. dollar, many still see it as a valuable way to diversify their portfolio (especially given the recent ups and downs) as something you can physically retain should banks or companies fail. Not everyone will see gold the same way, but keep an eye out for gold ETFs and purchases to rise this month.

Similarly to gold, people will also see cryptocurrency, which derives its value from supply and demand, as another safe haven. As of writing this, Bitcoin has jumped to $46,400.

Stock Market Prediction #5. Investors will flock to "stable," lower-risk investments

Given that we started this blog by talking about uncertainty, we should close it out by talking about the opposite. As uncertainty rises, many investors will flock to safer, more "stable" stocks. Obviously no stock is empirically safe. But what we mean by stable is low-volatility stocks with historically positive returns and reputations.

What are some of these types of lower-risk investments? For a deeper dive, check out our blog on 4 Reliable Short Term Investments. However, as a brief overview, there are other asset classes besides stocks that fall under this category of being lower risk and less volatile.

For instance, investment vehicles such as CDs (Certificates of Deposit), Treasury Bills (T-Bills), and Bonds, will likely be highly considered by investors as they seek to diversify.

It's important to note that every investor's goals and risk tolerance varies. Someone who's a more conservative investor will look to minimize risks, particularly during periods of volatility and increased global uncertainty. A more aggressive investor with a greater time horizon (such as a young millennial) may take more risks as they theoretically have more time to recover than someone who's at the tail end of their career or investment journey.


Stock Market Predictions for Q2 2022

Drops

As church leaders, at any given moment you could be having a collection of well-meaning sales reps infiltrating your inbox, selling you on how they can help your organization or church.

I know, because I am a pastor. I am also the founder of Overflow, a platform that helps churches unlock new levels of generosity through stock or cryptocurrency.

You may be thinking, "that's nice, but our donor base doesn't own that much stock."

At one point, I did too.

For generations, passing around the offering bucket was the standard means in which churches facilitated generosity. Then the internet came. Then Facebook. Then smartphones. Then apps.

And now, online giving is the standard.

What’s remarkable, though, is that statistics have shown we have yet to tap into possibly the biggest sources of generosity in stock and Crypto.

Creating a channel to facilitate stock donations has the potential to transform your giving infrastructure completely. Net-new generosity, gifts that wouldn’t have come in otherwise.

Just ask VIVE Church, as they recently raised funds for their new building.

"I know for a fact that without Overflow we wouldn’t have raised the $3M [in stock],” Aaron Williams, VIVE CFO, emphasized.

Still, questions persist, as they did for me. So let’s unpack them.

Do Most People Own Stock?

Let's start with whether or not most people even have stock.

Remarkably, research has shown that the majority of Americans actually do own stock and other financial assets outside of just cash.

The Signatry, a donor advising company, found that "90% of the average American citizen’s wealth is in non-cash or complex assets, such as stock or business interest."

And in the tech industry, an often transient sector, companies are giving stock to incentivize employees to stay / foster buy-in to the company. Per Bloomberg, Apple has been offering stock bonuses that "have ranged from about $50,000 to as much as $180,000" to retain employees considering a move to Meta (formerly Facebook) or other tech giants.

In an increasingly digital world in which traditional fiat currencies aren't exactly invincible (the ruble, Russia's currency, has lost 20% of its value in just a month), employees like the idea of longer-term security via stocks.

Given that, it's now a matter of changing the narrative to show that giving stock is both feasible and possible. As with any new thing, it takes time for a new technology to be integrated and normalized into our society.

The core issue right now is that they have it, but don't think they can give it. And it isn't just people in the tech industry or Silicon Valley that receive stock bonuses or own other assets.

A 2016 study by Fidelity Charitable found that: "80 percent of donors own appreciated assets, such as stocks, mutual funds or bonds, but only 21 percent of those donors have contributed these types of assets to charity."

Only 21% donated.

So it could be one of two things: either they simply do not want to donate stock, or they do want to donate it, but aren't aware of both the benefits and process of stock donation.

Benefits of Stock Donation

What are a few basic benefits of donating via stock?

The reality is that even in a traditional checking or savings account, money doesn't appreciate very much. Interest rates are so low - typically 0.01% annual percentage yield (APY) – that your recurring monthly gift will likely look the same.

However, a stock has the potential to appreciate significantly, which in turn pours more money into your church. This is something to be emphasized to your community, as people like to know that their money is being put to good use.

A good example of this is the aforementioned VIVE Church, in which their new church building campaign was propelled by stock and crypto donations. With the help of Overflow, half of the $6 million raised in 45 days was given via stock.

By giving stock, you're giving more. Per Fidelity Charitable, "by donating stock that has appreciated for more than a year, you are actually giving 20 percent more than if you sold the stock and then made a cash donation."

This is because the 20% capital gains tax rate (for long term holdings) is taken out when the stock is directly donated. Right off the bat, this takes out what would be a significant tax hit otherwise.

Here's what that looks like, practically:

Dan has an appreciated stock worth $30,000. However, he'd be subject to $6,000 in capital gains tax if he sells and gives it the "traditional" way. By giving his stock directly to his local church or organization, he saves $6000. When you consider saving for something like a new building or ministry, that additional $6000 makes a huge impact.

Another upside is that stock donations are tax deductible. By itemizing the deductions, you can reduce the tax burden on your overall income. That may not seem like a huge figure or a huge deal, but in the world of nonprofits and churches, every dollar and cent counts.

Lastly, from a more intrinsic standpoint, giving has been shown to make us happier. Empowering others and causes we believe in has a reciprocal effect on us, even one that has nothing to do with money.

According to a recent article from the University of California, Berkeley: "the National Institutes of Health found that when people give to charities, it activates regions of the brain associated with pleasure, social connection, and trust, creating a 'warm glow' effect."

What's the Process Like?

We live in a world where you can order a bathtub off Amazon Prime and have it arrive at your doorstep within two hours.

Which goes to say, even if we know the benefits of something, most won't act upon it if it's complicated, confusing, or difficult. Our culture is built on convenience.

And in the past, that's certainly been the case with donating stock.

It was painfully manual and took way more time and energy than most people had at their disposal. It could take weeks, months even. Are the benefits really worth the headache?

This is part of the problem we’re solving at Overflow. We recognized the experience of donating stock wasn't user-friendly, and has in turn simplified the process.

Nowadays, donating stock can be done using the Overflow Donation Platform with a few basic steps:

First, the platform links directly to your portfolio

Next, the stock donation is sent directly to the nonprofit

Tax deductions are automatically factored based on the "Fair Market Value" of the stock.

Initiate within minutes, settle within days.

If you’ve ever spoken to an Overflow member, we encourage you to reach out and follow-up with them for assistance. Otherwise, you can book a demo for a complete walkthrough, where any question or concern can be addressed.

The hope is that as a leader or vital team member of a nonprofit or church organization, you can see stock giving as a more realistic possibility. The proof is in the pudding that stocks are something people have, want to give, have incentive to give, and now have the tools to give.

We just threw a lot of information at you, so in summary, here are the major takeaways:

1) Many people have stock, but don't give it. This is revealed from the telling stat from Fidelity Charitable that "80 percent of donors own appreciated assets, such as stocks, mutual funds or bonds, but only 21 percent of those donors have contributed these types of assets to charity."

2) By giving stock, you're giving more. By donating stock that has appreciated for more than a year, you are actually giving 20 percent more than if you sold the stock and then made a cash donation. This is because you can get some major tax deductions, such as avoiding capital gains tax or being able to "deduct the full fair-market value of the asset you donated from your income taxes."

3) Giving stock is now easy, thanks to Overflow. You can book a demo here for Overflow's giving platform – a quick and easy process that takes a matter of button clicks.

Usually, things are too good to be true. But in this case, it’s not. It’s only a matter of time before you see an ROI on your investment into Overflow.

Not convinced your members have stock? Think again.

Crypto

But as a cryptocurrency holder or potential investor, you may have concerns that you'd be sacrificing simplicity or convenience. While that may have been true in the earliest days of crypto, vendors and merchants have made it easier to incorporate cryptocurrency into your regular shopping routine. After all, they have a big incentive to do so.

Crypto is becoming more mainstream and ubiquitous in society, and we'll start to see more and more shops accept cryptocurrency in a variety of forms. In the meantime, there's an easy solution that allows you to use your crypto right now: a crypto debit card. This is a relatively new phenomenon, as in the United States alone there was a waitlist to get one as recently as last year.

As a quick refresher, cryptocurrencies are "digital assets and decentralized systems that allow for secure online payments," per Investopedia. One of the biggest appeals is that the currency rises and falls according to supply and demand, not a country's fiscal policy or inherent currency value. Additionally, many are projecting cryptocurrencies to be "the future" of buying and selling.

What is a Crypto Debit Card?

As the name suggests, a crypto debit card can be used just like a regular credit or debit card, and is accepted in any place that accepts cards. That's because most crypto debit cards are issued by credit card networks like Visa or Mastercard that facilitate the transaction and ensure the merchant is paid in traditional fiat currency.

How does a crypto debit card work?

Most are preloaded, meaning that it has to be "filled up" ahead of time with the amount of desired cryptocurrency funds. This can be done via a cryptocurrency wallet, which adds a layer of safety to your crypto holdings. As frequent users of crypto know, there is a unique key (or password) used to access your account. Think of it as a helpful organizational tool for your various assets (just like a regular wallet!)

It's important to find the right company to supply your card, just as you would with a regular debit or credit card. Here are some of the top crypto debit cards on the market right now:

Crypto.com VISA Debit Card: With over 10 million users worldwide, this Hong-Kong based outlet is a staple in 90 countries worldwide. They tout an 8% cashback VISA crypto debit card and have even recruited Hollywood star Matt Damon to pitch their products. You may have even caught their Super Bowl ad, in which LeBron James is teleported back to his high school bedroom to give advice to his younger self. Crypto.com is arguably the most popular crypto debit card servicer out there.

Coinbase Card: Speaking of the Super Bowl, you may have caught that bouncing QR-code commercial during it. That was brought to you via Coinbase, a growing cryptocurrency exchange platform. They also offer their own crypto debit card, the Coinbase Card, which offers cashback rewards of 4% and robust security.

BlockCard: This is another prepaid crypto debit card provided by VISA. There's a $5 fee for use each month if you spend less than $750. Otherwise, it has no deposit and exchange fees. It also supports thirteen different currencies, including the popular staples Bitcoin and Ethereum.

Each of these outlets has their own line of crypto debit cards, and while we won't offer recommendations one way or another (that's ultimately up to you), it is true that each has unique perks, such as cashback, enhanced security, and low fees. Like most credit cards, you have to apply for a crypto debit card

Consider which card is the most accessible, practical, and backed by a reputable company. For instance, not every crypto debit card universally accepts every cryptocurrency out there. Many only accept the more popular ones, such as Bitcoin (BTC) and Ethereum (ETH), and some only accept certain fiat (traditional, government-issued) currencies for exchanges. Here's a helpful resource for determining which card might be the right fit.

Practically speaking, crypto debit cards have progressed to the point where you can use most at ATMs to withdraw money. Some aren't even physical cards in the first place, making them easy options to add to your digital wallet, such as Apple Pay or Google Pay.

It's clear that this isn't just a niche movement, as "more than $1 billion worth of cryptocurrency was spent by consumers globally on goods and services through their crypto-linked cards in the first six months of 2021," according to a recent CNBC report.


How do you use it?

Let's use the previously mentioned Crypto.com platform as an example. Needless to say, you need to be a holder of cryptocurrency in the first place. If you already are, you can skip this next part. If not, buying cryptocurrency has become much easier than the early "mining" days. When Bitcoin (BTC), for instance, was first introduced, prospectors needed complex computer setups running constantly to search for a single bitcoin.

Due to the growing ubiquity of BTC, there are now cryptocurrency exchanges where you can purchase it, and other cryptocurrencies, directly. Even popular stock-trading platforms like WeBull and Robinhood have methods of purchasing crypto. Those already stocked up with a specific cryptocurrency can trade one for the other (e.g. buying Bitcoin with Ethereum).

Once you're a holder of crypto, you can apply for one of the many cards out there – in this case, Crypto.com's VISA card. Next, you'd download the Crypto.com app or use their website to do a process called topping up. Remember that as a pre-loaded card, you'll have a fixed supply of funds that you can put on at a time.

Most platforms, such as this one, have a "top up" button, making it easy and accessible to preload your funds.

You have the option to load up your card with regular currency by using the fiat wallet option, but if you're trying to load it with cryptocurrency, you'll have to link it with your crypto holdings. Just like linking a regular credit card to a traditional financial institution account, you can link your crypto debit card to your crypto wallet, which conveniently holds the unique passkeys needed to access your crypto holdings.

As a third option, you can also top up your crypto debit card with another debit or credit card. Sounds counterintuitive, but some might choose to do this if they prefer the rewards or perks they get with their crypto debit card.



Pros and Cons of Crypto Debit Cards

"Why wouldn't I just use my regular debit or credit card?," you may ask. While everyone has different reasons for why they use a credit or debit card (some have cash back perks, accrue airline miles, etc.), there are some unique advantages that crypto debit cards offer.

However, we'll also look at some potential downsides to give a thorough, transparent overview of any limitations when it comes to crypto credit cards.

Pros:

No Exchange Fees: Because cryptocurrency is decentralized, meaning it's not regulated by a central banking authority, you can use it anywhere in the world without being subject to foreign exchange fees. Visitors of Canada from the United States, for instance, face fees to convert U.S. dollars into Canadian Dollars. The value of your crypto doesn't increase or lessen depending on where you are, as the currency itself isn't tied to a particular country's fiat currency system.

Easy to Spend Crypto: Using a crypto debit card makes spending cryptocurrency easy. For instance, if someone is paid bonuses in cryptocurrency or makes a significant portion of their income in various cryptocurrencies, they can quickly and efficiently spend said funds without hassle.

Rising Integration: As we'll get to in a second, many businesses have been slow to accept cryptocurrencies like Bitcoin, Ethereum, or Litecoin. However, there's reason for optimism. California currently has over 440 businesses (and climbing) that accept bitcoin, and in the U.S. alone, 2,300 businesses accept it.

More Bang For Your Buck (Potentially): Let's say you're a holder of Bitcoin (BTC), which is currently valued at $41,000 USD. And let's also say you're gearing up for a big purchase, such as a car. Your traditional accounts might not earn that much interest, but BTC could rise to $44,000 in a matter of days. By choosing to buy at the right time, your dollar may be able to go a little farther. However the opposite can happen too (BTC's value dips), as we'll look at in the next section.

Cons:

Limitations: As mentioned before, your crypto debit card may have limitations like being restricted to only certain cryptocurrencies or not working with traditional fiat currencies. Moreover, this is still a relatively new product / avenue so not every business or country is going to be infrastructurally prepared to accept crypto debit cards. For reference, 15,714 businesses worldwide accepted Bitcoin, as of 2021. That figure is growing, but it's still not as universally accepted as consumers would like.

Tax Implications: Unfortunately, crypto transactions are subject to capital gains tax. As NerdWallet writer Ruth Sarreal put it, "When you pay with your crypto debit card, that's a taxable event: When you use your card, you're selling some cryptocurrency and exchanging it for dollars, and you might be selling at a higher or lower price than you bought the digital currency for, meaning that you've created a capital gain or loss."

Volatility: Cryptocurrencies are still subject to high volatility these days, meaning your spending power will fluctuate. An example of this is Bitcoin fluctuating from ~38,000 to ~44,000 in just a week. If this kind of volatility makes you uncomfortable, a crypto debit card may not be the best option.

In other words, the aforementioned perk of being able to get a "bargain" for certain purchases could turn into a loss if the cryptocurrency you use drops in value. Here's a hypothetical scenario. You load your card with 0.12 in BTC, which is currently $5,000. However, BTC has a bad week or month, and suddenly the value on that card is much less.

Crypto Debit Cards vs. Crypto Rewards Credit Cards

A crypto debit card is not the same thing as a crypto rewards credit card. As mentioned before, a crypto debit card is typically a preloaded card that operates like a regular debit card: you can use the money that's on there and it automatically deducts when you make a purchase.

However, a crypto rewards credit card is just a regular credit card that uses fiat money. The only difference is that you can earn cryptocurrency for making purchases, just as you would with an airline mileage rewards card or traditional cash back card.

For example, many airline-based credit cards will offer you "30,000 bonus miles" for spending $3,000 in the first few months of having the card. Similarly, there are crypto credit cards that will give you hundreds of dollars in Bitcoin if you reach the purchase threshold.

You may even have a crypto rewards card without even realizing it. Venmo and Cash App, the popular money-sharing platforms, have introduced their own forms of crypto rewards. Cash App card users, for instance, can choose to receive crypto as part of their "boosts" reward system.

If you're considering a crypto rewards credit card, great. Just be sure to distinguish it from a crypto debit card.

Future of Crypto Debit Cards

Will we see a day when all transactions are done via cryptocurrency because it's the only currency that's even used? Maybe. But until that day, what is the viability of a crypto credit card over the next few years?

If the current rate of progress is any indicator, then the use of crypto debit cards will meteorically rise. Coinbase launched the first crypto debit card in 2015, and just seven years later there are hundreds of options and partnerships with major financial corporations like VISA.

Given what's transpired globally over the recent weeks, people around the world are looking for alternative safety nets when it comes to their finances. The Russian rouble (which has lost 20% of its value in just a month) is an example of how traditional, fiat currency can quickly falter under certain circumstances. Perhaps those currencies won't be considered "traditional" in the coming future.

An indicator that crypto debit cards really are here to stay is the surge of major industry players and companies seeking to kick down the door of the crypto card market. VISA certainly seized on the opportunity to become a facilitator of these transactions, but other popular financial institutions like PayPal, Venmo, Cash App, and Tesla are investing into crypto as well.

The only major hangup some experts foresee is increasing regulation of cryptocurrency by countries and their governments – or even outright bans. China completely banned cryptocurrency trading and mining last year, and eight other countries followed suit.

We can't predict the future or control how governments will regulate cryptocurrency. However, it's undeniable that cryptocurrency has a strong social sentiment and is growing ever-more popular in mainstream use. Crypto debit cards are a first step in demystifying cryptocurrency and integrating it into our daily lives.


A beginner's guide to crypto credit cards

The New Gold Rush?

In 2009, a new kind of "gold rush" was launched. This time, however, there'd be no physical journey, covered wagons, or swings of a pickaxe. All you'd need to embark on this quest was some expensive computer equipment, technological savvy, and patience.

A new phenomenon called "Bitcoin" hit the scene.

Bitcoin, if you're unfamiliar, is a digital, decentralized cryptocurrency created by Satoshi Nakamoto. Nakamoto, whose real identity is unknown, created the code to serve as the foundation for a new currency.

In the early stages, the value of one bitcoin was fractions of a cent. A year later, a man bought two pizzas for 10,000 BTC (Bitcoin), which signaled the first official transaction. Little did he know that his initial purchase would be worth over $347 million just 12 years later…

For some, this was reminiscent of the "speculative bubble" of tulipmania in the 17th century Netherlands. Tulips were a perceived sign of status and shot up in value due to people thinking that they had immense value. At one point, tulips sold for 10,000 guilders, which was enough to buy a mansion. Bitcoin works in a similar manner. The value comes from the fact that people think it has value, much like baseball cards. If people weren't interested in baseball cards, there'd be no way an autographed card would sell for much.

While some initially struggled to grasp the concept, Bitcoin had a huge appeal for those reeling from the recession and financial crisis happening at the time. For those who'd become distrustful of central governments and banks, Nakamoto's use of "blockchain" technology was highly appealing.

A blockchain is a living ledger, or in other words, a continuous, uneditable list that records every transaction that takes place. The goal is to place accountability in the hands of the public, rather than a central bank or government. Proponents of Bitcoin (and other cryptocurrencies) argue that this adds safety, transparency, and independence from the fluctuating value of traditional (fiat) currency.

In the early days of Bitcoin, Nakamoto set up a fixed number of bitcoins (21 million) that existed in his code. He wanted to design it similar to actual gold, which derives value from the fact that there's a limited supply of it in the world. While governments can print money (thus driving up inflation), Bitcoin draws its value from supply and demand.

You can either obtain bitcoin through bitcoin mining, or purchase it via regular (fiat) money. For the purposes of this blog, we'll be focusing on how to acquire it through the former.

What is Bitcoin Mining?

Mining for Bitcoin might sound like a treasure hunt, but it's more complicated than simply "digging for gold." And unlike the Gold Rush of 1849, Bitcoin miners are part of an efficient process, not a wild good chase.

In the most simple terms, Bitcoin mining is a.) a way that new bitcoins "minted," or, put into circulation, and b.) "the process of verifying and recording new Bitcoin transactions" (per The Balance). Even though Bitcoin is a decentralized currency, there's still a need for verification so that fraud or theft doesn't occur.

And as a reward for doing the tricky technical work of verifying, "miners" are rewarded via Bitcoin. It's a pretty good incentive, as miners receive 6.25 Bitcoin (BTC) for their work, which as of today is worth around $238,000. In that sense, it is quite comparable to the California Gold Rush, as the first to verify the transaction gets the reward.

Due to a process called "halving" (designed by Satoshi Nakomoto), the number of bitcoins issued every ten minutes is cut in half every four years. For the first four years, 10 minutes of mining would yield 50 bitcoins. Today, 10 minutes of mining will yield one bitcoin. In this process, the reward for miners also drops. When the 2020 "halving" occurred, the reward for mining dropped from 12.5 BTC to 6.25 BTC. By 2024, the reward will be 3.125 BTC. This is an integral part of capping the system's supply at 21 million.

Though Bitcoin is decentralized and designed not to be controlled by a single entity, it still needs some level of administration to avoid corruption and chaos. Bitcoin miners serve as the de facto "checkers" of the system to keep it accountable and efficient.

Can Anyone Be A Miner?

Anyone can be a miner, but you must have a fundamental understanding of the blockchain and the technological skill / resources. As mentioned before, the blockchain records transactions. Once a certain amount of transactions have been recorded, the block is added to the overall chain (hence "blockchain") and public ledger.

As a recent Forbes article put it: "Since these blocks are heavily encrypted, they're sort of like complicated math puzzles that only powerful compute-capable hardware can solve…The process of solving the math puzzles on these blocks and adding them to the public blockchain (think of it as a ledger) is roughly what mining is."

Let's clarify that these mining rigs aren't doing Calculus level work. Instead, they're trying to "guess at" a 64 digit hexadecimal number (hash) that matches up with the target hash number.


The Importance of Miners

The infrastructure of Bitcoin absolutely depends on miners. The verification work they do isn't just a simple check-off, but rather a thorough "audit" into the transactions that are going on. The goal is to prevent a phenomenon called "double spending," in which someone might try to illegally copy a bitcoin and use it twice. Think of it this way: if you hand someone a physical coin, you no longer have it. But when the transaction is digital, it makes it much harder to verify if that coin was actually given up.

If there were no miners, the system would fall apart. The process of confirming transactions and bringing new bitcoins into circulation is crucial – a big reason why the reward is so massive and incentivized for devoting time to mining.


Mining Process

To solve these complex equations, miners use advanced, high-powered computers. This group of computers is called a "mining rig." Your rig should have:

A high speed internet connection

Sufficient computer storage

Optimized mining hardware and software

For those wanting more efficiency, you can join a "mining pool" to tag-team and verify transactions at a quicker rate. The rewards are less overall (given that they're shared), but more frequent. In fact, it's almost impossible to mine on your own in 2022. At the start of Bitcoin in 2009, you could mine 200 BTC in a few days. But by 2014, that number had dwindled, prompting the creation of ASIC computer miners. Per Investopedia, "An ASIC miner refers to a computerized device or hardware that uses ASICs for the sole purpose of "mining" digital currency."

It's important to note that mining rigs run constantly throughout the day, thus requiring lots of time & energy-use, and therefore lots of money. Many believe the Bitcoin rewards will justify the setup costs, but it's important to note the inherent costs of getting into Bitcoin (or other cryptocurrency) mining in the first place.

Fortunately you don't have to be actively tinkering with anything at your computer, making it a somewhat passive process once set up. Once you're set up with the mining software of your choice, you press a button and let your rig start solving these equations.

Miners typically want to have a good "hashrate," which is "how much computing power is being used by a network (for example, the Bitcoin network) to process transactions," according to Robinhood.

In short, you don't have to possess expert-level technology skills to participate in bitcoin mining, but be aware that there's both a learning curve and monetary effort required.

Environmental Concerns

The sheer amount of energy used in Bitcoin mining has raised resource concerns, and called into question its long term viability. Though there eventually won't be anymore bitcoins to mine, the whole infrastructure still requires immense computing power.

A single Bitcoin transaction, per PC Magazine, uses 2292.5 kilo-watt hours, which translates to 78 days of use by the average American household. Given the current state of the world's energy following the Ukraine-Russia war, energy-related costs are going to have an impact on everything, from commuting to air travel to operating technology.

That said, it's only an ecological problem if it depends on an environmentally unfriendly source. If there was a way to operate mining rigs via cleaner, renewable energies, it would minimize the carbon footprint of sustaining these cryptocurrencies. The Crypto Climate Accord wants to run all blockchains on renewable energy by 2025.

In the meantime, the energy cost/benefit analysis is something to consider for those interested in venturing into the world of Bitcoin mining.


Is it worth it?

Ultimately, that question can only be answered by each individual's long-term financial goals. If you're willing to put the time, effort, and energy into it, bitcoin mining isn't impossible to get into. That said, it's by no means an easy process, as it is quite competitive. (It should also be noted that income and profits gained from Bitcoin are taxable.)

Nowadays, it takes 10 minutes to mine a single block of bitcoin. However, there are thousands of other miners competing as well, making it increasingly harder for just one person with one rig to reap the rewards, hence why many opt to join those aforementioned mining pools.

The good news is that (at least for the time being), miners are an essential part of the entire infrastructure of Bitcoin. The system was designed to make it harder and harder to obtain bitcoin as the years progressed (many project the last bitcoin won't be mined until the year 2140). While mining has become less common due to newer ways to obtain bitcoin, such as a cryptocurrency exchange, it's still a viable outlet and only takes some basic research and practice to get involved in.


How does bitcoin mining work?

While no investment is 100% guaranteed to succeed, there are ways to attain stability, liquidity, and low transaction costs. Why are those three things important?

Stability: The opposite of volatility. As the name implies, it means there's a strong track record of the investment being low-risk and robust.

Liquidity: How quickly could you turn your asset into cash if you needed it? If you can confidently sell your investment without it affecting the market price, you have liquidity. If you're wanting short-term investments, you want to make sure your money isn't tied up or inaccessible for decades.

Low Transaction Costs: Being bogged down by high transaction and brokerage fees can often dissuade someone from committing to an investment. For instance, there are often fees a broker will charge to complete a transaction. However, the short-term investments we'll look at today have little to no transaction costs, allowing you to maximize the most of your money.

The takeaway today is: investing doesn't have to be scary, and you don't always have to wait years and years to see some kind of return. There are plenty of short-term investments out there that have been used for decades and continue to be reliable ventures.

For the purposes of this article, we'll define reliable to mean low-risk, secure investments. In other words, investments where it's extremely unlikely that you'll lose money due to various protections (e.g. government or bank insurance). And by short-term, we mean anything set to give you a return within 5 years. Technically speaking, a short-term investment is anything that gives you a return in a year or less, but we've expanded the definition to 5 years of less to broaden the scope of potential options.

Using data, metrics, and professional opinions, we can make informed decisions as to what are the best fits for our individual portfolios.

Remember that while investing takes risk, it's not the same as gambling. There are expert-driven metrics we can study to ensure we're planting our money both strategically and wisely.

Here are four reliable short-term investments you can consider as potential options.

Investment 1: Certificates of Deposit (CDs)

Most of us haven't heard the word CD since 2010, but there's another kind of CD that continues to be a staple of the investment world.

A Certificate of Deposit (CD), can be acquired at a bank or credit union and involves depositing a certain amount of money that cannot be accessed or touched for a prescribed amount of time. It's a similar concept to a savings account, as you passively leave money untouched and in the hands of a banking institution.

Unlike a savings account, which historically has low rates of return (the current national average is 0.06%), a CD can produce much greater returns because you get a locked-in interest rate from the beginning. The trade off, as stated before, is that you cannot access this money for a certain amount of time. If you really need that money, you'll be hit with an early withdrawal penalty, which compromises the potency of the investment. Certificate of Deposit term agreements range from 3-6 months to 7 years, depending on what your goals are.

The downside? If you lock-in a rate that seems solid and launch into a long-term agreement, you may miss out on a CD with a better rate that becomes available down the line. Granted, the disparity between CD rates is often pretty small.

If you have a lump sum of cash that you don't actively need at the moment but could foresee yourself needing in the future, let it grow in a CD. It should be noted that CDs don't offer massively higher interest rates than a typical savings account, but they're often more than the aforementioned 0.06% – especially if you agree to a longer term.

For instance, a 72 month (or 6 year) CD with First National Bank of America has a historical APY (annual percentage yield) of 1.3%, and only requires a minimum deposit of $1,000. Let's see how that stacks up against a traditional savings account, using an initial deposit of $10,000 as an example.

$10,000 invested in a savings account (without contributions) for 6 years at a rate of 0.06% APY growth would grow your account by $36.

$10,000 invested in a CD for 6 years at a rate of 1.3% would grow your account by $805.79

As you can see, the higher the initial contribution, the higher the potential return. But the difference here of $769 shows that one could obtain a return 20 times greater provided you don't need to access that money for a good amount of time. And if you're putting money in a savings account, that was probably your goal to begin with anyway.

If you're interested in opening a CD, make sure to scour the internet or contact some local banks across the nation to see what they'll offer you. You don't have to open up a CD at the same bank or credit union where you have your primary checking account. Doing some research can help you find a more competitive rate. And be on the lookout – the rates change every few months in accordance with the Federal Reserve's direction. Here is a snapshot of competitive rates at any given moment.

Bottom Line: CDs won't give you whopping, jaw-dropping returns, but they will give you way more than you could get from a typical savings account. If you're planning on not touching it for a few years or if you're looking for another way to diversify, you'll be pleasantly surprised with a CD. Moreover, they're extremely safe as they're protected within FDIC guidelines and guaranteed in interest rate for the CD's duration. For the relatively conservative, low-risk investor, this is a savvy move.

Investment #2: Short Term Bonds

Similar to CDs, bonds have a fixed rate of return over a certain period of time or term length. With bonds, you loan out your money to a government, institution, or company. And just like a regular loan, you eventually get your money back after the loan term ends and receive yearly interest income along the way.

The initial investment is called the principal. The length of time you loan out the money is called the maturity date. And the yearly percentage paid out to you is called the coupon rate. Let's say you had a five year maturity date and loaned $5,000 to the government. The current annual coupon rate for a government bond is 1.76%, so your annual payout would be $88. After five years, you'd have gained nearly $500 on a "leave it and forget it," short-term investment.

Just like stocks and ETFs, there are many different types of bonds.

Some of the most popular include municipal bonds, corporate bonds, and series-I savings Bonds. Of that list, municipal (or "muni") bonds and corporate bonds are often used as short-term investment bonds, i.e. a term of one to four years. Here's the brief scoop on each:

Municipal (Muni) Bonds: These types of bonds are often issued by local and state governments as a means of financing public works projects like roads, schools, and parks. Typical investment amounts range from $5,000-$10,000 and have the perk of being exempt from many city and state taxes on interest.

Corporate Bonds: Described by some as "the last safe short-term investment," corporate bonds are utilized by companies to raise capital. And unlike treasury savings or municipal bonds, these are linked to private and public companies (or non-government entities). One of the biggest upsides is that they often have higher rates of return than government-related bonds.

Series-I Savings Bonds: These bonds, also known simply as I-Bonds, are specifically linked to the U.S. Government and relatively low-risk opportunities. Per the U.S. Treasury: "during their lifetime they earn interest and are protected from inflation." The goal itself is to protect your money from losing value due to inflation. Moreover, you don't have to be rolling in cash to purchase one, as the minimum deposit amount is $25. Though most carry a 30 year term, they can be cashed after a year with minimal penalty.

Bottom Line: Bonds, like CDs, are reliable safety nets and can be put in the low-risk category. One of the perks they provide is a consistent income from the interest returns obtained each year, as opposed to having to wait years to reap the rewards with the initial investment paid back at the end of the CD’s term.

Investment #3: Money Market Accounts

Money Market Accounts (MMAs) are savings accounts with higher return potential (typically an APY of 0.5-1.5%, per NerdWallet). If you don't have wiggle room in your bank account or aren't a high roller when it comes to investing, MMAs are a good way to venture into investing.

Let's say you're a recent college grad working two jobs and don't have the risk tolerance to go big on a speculative investment. Maybe you take that extra $5,000 yearly bonus or money you made in tips and throw it in MMA for a year. If you find a bank that offers an interest rate of 1.5%, you'd net $75. That's not an eye popping amount, but it requires no effort other than setting up the account in the first place.

Safety-wise, you can't get much more bulletproof. Your money is subject to FDIC guidelines, you can cash your money easily at any time, and there typically aren't any fees.

There's an old adage that a journey of a thousand miles begins with a single step. Don't discount that modest amount you accrue from a Money Market Account. Not only can they help build your confidence as an investor, but also the money you earn year over year adds up over time. And like with anything, you have a cushion to reallocate those gains towards other short-term investments.

Here are a few expert-recommended Money Market Accounts you could consider, per Business Insider. Of that list, the Premier Members Credit Union stands out for its generous 2% APY on investments as low as $5-$2,000. Their rates actually go down the more money you add, so it's an appealing option for short-term investments.

If you gave $2,000 at that 2% APY rate, you'd earn $40 a year. After 10 years, that's $400 you didn't have before.

Bottom Line: It's easy to swing for the fences and disregard the seemingly "little" gains. But the reality is that safety and modest gains go hand in hand. There are ways to minimize your risk when it comes to more speculative, volatile investments, and this is one of them. Having something like a Money Market Account diversifies your portfolio and gives a nice safety net and cushion that might empower you to make bold choices in other areas. Or perhaps you're content with just making a little money on the side and getting some practice investing. In either way, think of a Money Market account like your classic savings account with more returns and added perks.

Investment #4: Generosity / Giving / Philanthropy 

This one might come as a shock, as philanthropists in our society are stereotypically wealthy individuals looking to give away their money to a good cause or foundation. While that's true in some cases, generosity can be an investment (in several senses of the word) for anybody – regardless of how much they give.

From a purely financial standpoint, giving can provide others with economic empowerment while also offering tax write-off opportunities for the giver. According to Fidelity Investments, this is a practice known as "impact investing." Here's how they describe it:

"This strategy is based on the idea that you can align your investments with your personal and philanthropic values while realizing financial returns. So, for example, if you were interested in reducing the use of fossil fuels, you might invest in funds focused on companies that develop innovative renewable energy solutions."

On one hand, giving could be a means by which you help develop an organization or cause you believe in. A prime example of this is when Overflow collaborated with VIVE Church to help maximize giving towards their new building campaign.

Many donors ended up giving stock or crypto towards the building campaign, both because they believed in the church's mission and they knew they could expand their impact by giving tax-exempt donations (cryptocurrency and stock donations currently are not subject to capital gains tax.)

Whether you're a big time donor or simply a consistent giver, there are a myriad of tax breaks and deductions you can seek while also ensuring that the full value of what you give carries over and truly helps the donation recipient.

However, there's also a deeper value to giving that forms an irreplaceable connection with people that money can't. Ascent, a private loan agency, has done research on the emotional / mental health impacts of giving, and the intrinsic results were powerful. Here were just a few of the benefits they saw:

"On average, generous people reported having slightly more close friends with 3.2 compared to 2.6 for less-generous people."

"High-generosity respondents reported higher rates of satisfaction with their possessions (75% versus 60%), homes (73% versus 56%), and vehicles (72% versus 55%)."

But the broader point is this: even if you never fully "reap the rewards" of giving, or it doesn't come full circle, or no one even knows you gave, that doesn't take away from your generosity.

There's a Proverb in Scripture that says "the world of the generous gets larger and larger." To be clear, it's not saying that the generous are guaranteed happiness. As our founder, Vance Roush puts it: "We don’t give to get something in return, but because when we give, we connect ourselves to something beyond ourselves."

As you consider the above strategies (Bonds, CDs, etc.), remember that metrics can only show you so much. Baseball is actually a perfect example of this. There's a billion advanced metrics that can tell you why you should or shouldn't keep a pitcher in the game. But sometimes managers keep a player in who's on a hot streak because they can see how much they want it.

What does that have to do with investing? It's just a simple reminder that at times we need to step back, get perspective, and let our heart jump in the driver's seat. Investing can be a tiring, taxing process, and giving helps us see outside ourselves and engage life with new perspectives. You may not be able to put a monetary value on that, but it'll make your world grow larger in perspectives, opportunities, and genuine, authentic connections.

Bottom Line: Your CPA or even TurboTax professional can help you with your unique tax situation, and can help you achieve the biggest bang for your buck when it comes to charitable or philanthropic giving by donating stock or cryptocurrencies. That said, you can't go wrong by simply investing in others and witnessing the way that shapes and redefines your relationship with money.


4 reliable short-term investments

When you hear the word invest, or investment ideas, your mind might drift to stocks, real estate, or mutual funds. These are potential options that are popular in the investing world, but there's a host of other options available if you are looking to go less "conventional" routes.

As far as the stock market goes, some are fearing the impact of Russia's invasion of Ukraine and how that will affect food, energy, and financial investments. Moreover, a strong 2021 for the stock market hasn't fully translated to 2022, as January limped to a slow start.

Given that, what are some out-of-the-box investment ideas that can still produce a good harvest while remaining relatively safe in our chaotic world?


Investment Idea #1: Peer to Peer Lending

As the name suggests, peer to peer lending entails providing a short-term loan for another person. In a sense, we do this for people all the time. If you ever asked your parents for money and promised to pay them back (plus a little bit of extra chores as "interest"), then you in a sense received a Peer to Peer (P2P) loan.

But in a broader sense you don't necessarily have to know the person, as websites such as Peerform or Upstart can connect you with people across the globe looking for a relatively small loan (typically no more than $25,000-50,000) to finance a project, business venture, paying off a credit card, or tending to a personal matter.

For a lender, this may raise some red flags right off the bat:

How am I covered if the person doesn't pay me back?
Can I really make money off of this?
Don't most people just get loans through a bank?

Those are all valid questions and part of the reasons why P2P lending isn't necessarily the number one option for investors, despite having a low rate of default the last few years. Going through an intermediary like Peerform or Upstart adds a level of protection, however it should be noted that (as with most investment ideas) there are inherent risks to lending this way.

The loan isn't covered by FDIC (government) insurance, and you may not get the same rate of return if the borrower pays the loan off early. Additionally, if you aren't reinvesting the payments from the loan, you'll eventually be left without much capital once the loan term ends.

On the flip side…

The P2P market is still relatively new (it started in 2005), and it is projected to grow exponentially over the next five years. By 2027, the global P2P market is set to reach about $558 billion, with an astounding 29% rate of growth per year, says Market Watch.

In addition to being a dynamically growing arena of investing, P2P loans can also yield rates of return comparable to traditional investment ideas. Some investors have seen returns between 7-11%, which stacks up nicely to the average stock market return of 10% (in a good market).

Though the rates of return are similar, the biggest upside to P2P lending is that it puts you in the driver's seat and casts a wide net of people you can work with. Think of it like going through a buffet and choosing exactly what you want on your plate. When you set up a lender profile on one of the myriad P2P sites, you can specify exactly how much you're willing to give, what your risk tolerance is, and who you'd like to work with.

Some might be willing to take a flier on someone with a bad credit score and compensate by charging them a higher interest rate, but if you prefer to play it safer, you don't have to lend to people with questionable financial backgrounds. Sure, you may limit some of your options, but a common misconception about P2P lending is that it's an outlet for people whose financial decisions are too shady for a bank's taste.

The reality is that many people want to cut out the traditional middleman (i.e. banks, financial institutions), and instead go directly to the source. We see this in the emerging world of cryptocurrency, which isn't reliant on a central regulator and allows each party more flexibility. A transaction between two people is much simpler than a transaction facilitated by a bank or stock broker. Sure, the aforementioned sites like Peerform and Upstart serve as de facto intermediaries, but they're mere facilitators of a relatively straightforward transaction.

Another big selling point is that this is passive income in the truest sense. You have money to lend, you authorize someone to use it, and you make money off the agreed-upon interest. Unlike real estate, in which you may have to arrange for repairs and maintenance on your rental, you can provide this loan and reap the benefits of it throughout. There's not a lot of day-to-day maintenance involved.

And from a more societally-conscious standpoint, you can empower someone else's dreams, such as starting a small business or nonprofit, by giving them a financial opportunity that they cannot find elsewhere.

If you're intrigued by the idea of P2P lending, here are a few practicals on how it works:

First, find the platform that aligns most with your goals. Some have appealing protections like helping you diversify your loan to minimize risk, or offering advice on where you can invest your money.

As a lender, you'd next choose a potential borrower you'd like to work with, based on the listing that the borrower has provided. For instance, the borrower might be looking for someone to loan them $40,000 for 36 months. Lenders can then bid on which borrowers they want to go with before getting matched. If the agreed-upon interest rate is 10% for the personal loan, you'd make $12,000 as a lender over the three year period.

Bottom Line: Peer to Peer lending definitely has its risks and is still somewhat in the fledgling stage of its inception. The rates of return are solid, not astronomical, but if you have a general distrust of the stock market or conventional means, want to help someone out, and are seeking a relatively passive investment idea, this is a fantastic option. Given the associated risks, you may want to make this part of your portfolio, but be sure to diversify, or spread out, where you're investing your money.

Investment Idea #2: Giving

Similar to providing a loan, giving may seem counterintuitive to investing. When you think of generosity or philanthropy, you likely think of money given with no strings attached. There's no interest or quid-pro-quo on the side, as generosity entails giving out of one's own heart. Many feel a calling to provide for those in need, or empower people who are struggling.

In no way is giving simply about the "perks." However, it would be a huge oversight not to see giving as an investment idea – both monetarily and intrinsically.

Much like giving someone a Peer-to-Peer loan or even simply letting someone borrow money, giving enables people to have financial freedom and accomplish their goals and dreams. The world of the generous really does get larger and larger, as we remember that we ourselves have been recipients of immense generosity. Ask anyone how they got to where they are today and you'll be hard-pressed to find someone who wasn't helped along by someone who genuinely wanted to see them thrive.

And while generosity isn't always about getting something back in return, there are practical ways it can be a win-win situation for both sides. For instance, giving is one of the simplest ways to reduce your tax burden, especially when it comes to Capital Gains.

The dreaded capital gains tax is a big revenue source for the government and is levied if you earned money on stock, real estate, or other investments. If you have something that's greatly appreciated over time, such as a home or property, you might cringe at the idea of giving up potentially 15% of your gains.

However, there are a few ways to circumvent this. If you have extra assets that you don't need or want liquidated, you can donate them to a charitable organization or community in need.

Doing so not only provides an opportunity for the recipient, but also may give you an income deduction on the fair market value of the asset. According to Fidelity Charitable, "not only can you deduct the fair market value of what you give from your income taxes, you can also minimize capital gains tax of up to 20 percent. Assets subject to capital gains taxes can include investments like stocks or mutual funds, or hard assets like real estate."

Another way to potentially avoid paying capital gains tax on giving is by donating via cryptocurrency or stocks. In many situations these types of charitable donations aren't subject to capital gains tax, so like the above example, it really maximizes and strengthens your gift. Consult with your tax professional to determine how to proceed in your given situation.

Let's say you're passionate about giving to a local food bank charity. Your first inclination might be to sell your stock and use the returns as a means of giving. However, selling your stock may still be subject to Capital Gains tax, while donating said stock directly could save you from having to pay capital gains (the charity does not have to pay it either) and in turn funnels more money and resources to the charity of choice.

Overflow has made this type of giving possible by taking out the stress and reducing the process to a matter of button clicks. Just a few years ago, this kind of giving via stock or crypto was relatively unheard of, and the process was esoteric and cumbersome for the giver. However, the more people become aware of other giving outlets, the more they can expand their giving portfolios and reach charities and nonprofits in need.

For those concerned about time, Overflow does the legwork of bringing donors and nonprofit organizations together by facilitating the connection and communication both ways. And for those needing support, there's a dedicated support team throughout the entire process.

Bottom Line: Not only does giving empower others, it also offers a variety of tax breaks that can save you a considerable chunk of change come tax season. Beyond that, there are strategies to help the dollars you give are stretched to their full capacity and in turn benefit both the giver and recipient. Giving is a genuine investment idea, whether you see it as a tax-time saver or a tangible investment into your local community around you.

Investment Idea #3: Future-Oriented ETFs

Think of an ETF (short for exchange-traded fund) like a picnic basket of stocks. Instead of solely pouring your money into one company, which has potential to boom or bust, ETFs are passively managed by experts with the goal to achieve identical returns than its specified benchmark or index.

There are traditional ETFs that are pretty commonly invested in, such as ones that track with the S&P 500, but it's worth considering the direction that the world is headed and keeping an eye towards the future. Companies like GlobalX have curated ETFs that take into account what the world might look like 5 to 10 years from now.

Some of their most popular ETFs include a Robotics & Artificial Intelligence ETF, a Blockchain ETF, and a Lithium and Battery Tech ETF. Given the more unconventional nature of these stocks, Global X brands them as "Beyond Ordinary" ETFs.
However, the data shows that jumping on the train early could yield massive results. The $23 billion dollar robotics market is set to triple, reaching close to $74 billion by 2026. Beyond that, artificial intelligence is becoming more ubiquitous in your daily life – just ask Siri.

Something like blockchain technology, which is used in cryptocurrency, is projected to increase tenfold by 2026, according to Markets and Markets Research.

What is blockchain technology? According to advisor Pedro Palandrani, "in its most basic sense, a blockchain is a type of database focused on recording and maintaining data." Though many associate this technology with something like Bitcoin, Etherium, or other cryptocurrencies, blockchain can also be used for digital voting, official record keeping, or posting of property sales.

You may look at the numbers right now and be hesitant to commit to an ETF that doesn't have a proven performance record or isn't hyped up by the news. That's totally understandable. However, if the purpose is to think outside the box and keep an eye towards where the world is going, putting some of your investing portfolio towards future tech can be an effective long-term strategy.

That being said, some of the aforementioned ETFs are already performing well. The Global X Robotics & Artificial Intelligence ETF has nearly doubled in share price since the start of COVID in 2020, and is projected to continue the growth as supply chains rebound and technology improves year after year.

Bottom Line: Energy and real estate, two of the typically-sought after investment ideas, are facing uncertainty with war in Europe and a red-hot housing market that could either continue surging or pop as inflation rises and citizen buying power dwindles. Beyond that, the COVID-19 pandemic has pushed more people to be reliant on devices like laptops and smartphones as they work remotely. With the rise of tech giants like Meta, Tesla, and Amazon, there's no question that our world is growing increasingly more digital. Given that, investing some of your portfolio with an eye towards the future may be a sound, proactive move.

3 out-of-the-box investment ideas

It's no secret that the Bay Area is one of the most expensive, fastest-growing regions in the country. Home prices hover around $1.5 million on average, and an influx of skilled workers has brought increased competition in both the job and real estate markets. Suffice to say, finding space isn't easy.

When VIVE's lead pastors, Adam and Keira Smallcombe, made the huge leap from Australia and sold everything to plant a church in the Bay Area, they knew it would be an uphill battle. Yet a faithful, committed journey of trusting Jesus over the past nine years has produced a thriving church that improbably exists in the nation's hub for technological distraction.

While Silicon Valley works hard to create algorithms and apps designed to keep you hooked on your screen, the Smallcombes have opted for the opposite route. They recognized that having a tangible, physical, in-person space is an important key to building a healthy church community in a transient city. Moreover, they knew that as the world inched back to normalcy, people would be hungering for a space they could encounter God and community.

In the early days, the church rented buildings and was able to launch 10 locations around the globe in the process, including far-off destinations like Honolulu and Rome. In turn, this rapid rise of congregants led VIVE to begin fundraising for a permanent, church-owned campus in nearby Palo Alto, home to Tesla, Facebook (Meta), Google, and a myriad of others tech giants.

As expected, the price tag for a building in Palo Alto was a cool $32 million, and to have a chance they'd need at least a $12 million down payment. They already had $4 million in cash available, but still needed to raise the remaining $8 million.

With clear communication and vision, trust in God and the community, and unexpected forms of donation, VIVE boldly embarked on a journey to acquire a building that would serve as a vehicle to accomplish their mission.

Could they achieve the seemingly impossible?


The Vision

The first step was to clearly communicate the vision, or the why behind the building. When someone hears the church is going to spend millions on a building, the first reaction is often an eye roll. Why don't they just figure out somewhere else to meet?

As mentioned before, the church was longing to deepen its roots in the city. That's hard to do if you're constantly ducking in and out of different buildings that can never truly be called home.

Secondly, the Smallcombes had a calling to plant specifically in the Bay Area. According to Pew Research center, only 42% of Bay Area residents surveyed said they had a definite belief in God. And within the immediate vicinity, 98% are unchurched, meaning they profess no faith. For them, the impetus to spread the love and message of Jesus was pressing.

Moreover, the church wanted to break down stereotypes of what it meant to be "religious" and emphasize the beauty of relationship with Jesus. So much so, they started their church with a campaign called "Not Religious? So Are We."

But beyond just meeting the needs of the present, the church wanted to set up a legacy and support system for generations to come. The seeds planted now would result in a huge harvest for the future community, but those seeds needed to be planted right away.

Adam Smallcombe was passionate about the urgent need to create a space for building up, training, and edifying people to build God's Kingdom.

"This building will enhance every aspect of VIVE Church as the global ministry headquarters accelerating the development of leaders and church planters, creating ministries for youth and young people, establishing Bible College and seminary trained ministers that will set the church up for an exponentially greater reach and impact than ever before," he said.

Pastor Adam’s passionate messaging needed to be dispersed throughout the community in a way that captured his genuineness and intentionality. They had to make sure they were on the same page as the people who'd eventually be sharing and partaking in this space as one community.

To use a corporate reference, a business wants to make decisions that will make its stockholders happy, and the most effective businesses develop strategies for making sure their constituents are both in the loop and aware of future plans.

Here's how VIVE's CFO, Aaron Williams, put it:

"We had to execute clear communications about why we [were] doing it and how we [were doing it. This is for [generations] to come. This [was] for legacy and to be a launchpad for other locations. It was just the beginning."

Williams went on to say that in addition to benefiting VIVE's mission, the goal was also to impact the local community around them. But in order to benefit the community over the long-term, they needed their help in the short term.

The Plan

When you break it down, raising $8 million over 60 days means accruing an average of $133,000 per day. That's enough to make your palms sweat, and feels like a daunting goal. For some churches and nonprofits, raising $100,000 in a year is a challenging feat. However, Williams and his team set out to appeal and pitch to the community at large.

"We [had] to engage everybody…our community, leaders in the area, CEOs in tech companies , singers, athletes, et cetera," Williams said.

The church knew it had a leg up because of the relationship they'd built with the community over the past nine years. Pastor Adam, known to be a man of his word, strove for transparency in all of his communication. A social media campaign was launched with candid appeals as to why meeting this financial goal was so important.

Drawing from Isaiah 54, "Spare No Expense" became the rallying cry, and members of the community shared their heart on why they were giving without reservation to the cause.

While the initial honesty, transparency, and pitch to the community was a boon to giving, the church knew it still needed to explore other avenues. A relatively unexpected one arose when a member of the church asked if he could give via a stock donation.

Not seeing why they couldn't accept it, the VIVE financial team began exploring stocks and cryptocurrencies as new forms of giving. With both of those options, however, the process isn't as straightforward as writing a check or sending someone money on Venmo. There are some technical, complicated aspects of facilitating the transfer and ensuring both parties feel comfortable and safe with the transaction.

Enter Overflow

Nowadays, you can simply visit this link if you want to donate credit, debit, stock, or crypto to VIVE Church. It's pretty straightforward and involves a few short button clicks and entering your email.

This simplicity and accessibility helped harness the giving of the deeply generous VIVE community. In turn, Overflow was excited at the possibility of showcasing just how much giving can be maximized when people have the right tools and knowledge of how to give effectively.

Soon into their partnership with Overflow, the church saw immediate results. Just 45 days into accepting stock and crypto donations, they were able to raise $6 million, 90% of which came as a direct result of Overflow's assistance. Half of that $6 million given was stock, a unique asset that has the potential to grow and be a revenue source for quite some time.

"I know for a fact that without Overflow we wouldn’t have raised the $3M [in stock]," Williams emphasized.



The proof is in the pudding, but it's important to remember this wasn't a wave of a magic wand or an overnight change. Overflow implemented practical, specific steps to smoothen out and streamline the process, such as helping to handle errors that donors didn't have time to worry about.

As the saying goes, time is money, and it is an increasingly precious resource in our busy, overloaded culture. For VIVE Church, the impact went beyond strictly financial donations. It cleared a pathway for their team to focus their time on other areas and not have to worry about administrative or logistical hassles.

According to Williams, Overflow helped save their administrative team 4 to 6 hours a week. Instead, any questions or concerns could be directed to Overflow's team of dedicated representatives.

"The customer success team is amazing, super responsive, answers all questions, and is easy to reach. They are probably one of the biggest reasons [Overflow] is much better than the other platforms we used," he said.

The story has a happy ending: VIVE Church closed on the new property, meaning they've officially secured the building after a journey of enduring, promoting, connecting, and trusting. They'll soon move into their building and carry out the vision that once felt like a pipe-dream.

The Nitty Gritty

You may be reading this thinking: "that's a heartwarming story, but how did Overflow streamline this process, other than just raising awareness and making a platform to donate new assets?"

When VIVE Church put the responsibility of crypto and stock donations in Overflow's hands, it wasn't just a one time transaction. Overflow became VIVE's dedicated team and provided customer support, donor engagement tools, and handling of financial details.

The biggest takeaway from VIVE's success in this campaign is that donors want to know they can trust the process. If something works for us reliably, we tend to use it over and over again. In other words, we like to take the path of least resistance. On the flip side, if a donor feels like it's challenging to give, they may not follow through, even if it is their heart and intention to give in the first place.

Opening up a variety of giving avenues and offering support while embarking on that giving journey has emboldened donors and increased the retention rate of donors. Especially in areas like San Francisco, Palo Alto, San Jose, and beyond, the means by which people acquire and give money is changing. Many are paid bonuses through stock, or use cryptocurrencies as their primary investments. Therefore, the reserves they have to give are often tied up in other areas, and cash donations become less appealing.

Additionally, donating stock or crypto means you don't have to pay capital gains tax on it. For an $80,000 investment, for instance, that would be $12,500 saved.

Many see cryptocurrencies as the currencies of the future, and Overflow is helping VIVE and other churches and nonprofits adapt with the times. It's clear from VIVEs building campaign that you can accomplish massive goals if you open up the right pathways.

Think of it this way: if a water source was blocked in a variety of directions, you'd want to clear out as many obstacles as possible so that the water could flow smoothly and effortlessly. Yes, the desire to give still needs to be present, but it's a heck of a lot easier to align people to one mission if you give them options as far as how they can take part.

Conclusion

VIVE Church's building campaign might seem like an anomaly, but this same situation can be a reality for other churches and organizations with big goals and dreams. More often than not, it just takes a little boost to launch an already well-thought out idea. In VIVE's case, Overflow was that added boost.

You can't force anyone to give or completely alter someone's attitude or heart towards giving. However, you can make it more appealing and more accessible. It's a two way street. When nonprofits have the relief of not having to divert their time worrying about the details, and when donors can feel confident about the ways in which they give, you open up a whole new world of possibilities.

How VIVE Church raised $8 million in 2 months

Company

Less than two years ago, I founded Overflow. I believed then, as I do now, that there is an opportunity to unlock unprecedented amounts of generosity through non-cash assets. 

I want to thank each and every one of our customers, investors and partners. You’re the reason we show up every day. You’re the reason we do what we do. You inspire us, encourage us and give us purpose.

It’s because of you that we’ve helped more than 200 nonprofits raise over $11.5M. While that’s incredible, it’s only just beginning. There is over $40T in the US public markets, and we won’t stop until we unlock as much philanthropic value as possible!

Nonprofits are the backbone of our communities— working at the macro and micro levels, meeting critical needs, partnering across sectors to support themselves and engage in philanthropy. We are grateful for all that you do, and are committed to supporting you with new ways to unlock more generosity!

Perhaps the biggest highlight for me this year is seeing the Flow Fam grow, from six people to more than thirty people and counting! While we’ve largely worked virtually, we’ve had the opportunity to come together as a team to collaborate and have some fun. It’s in these moments, we’re reminded of the importance of human connection. I look forward to more time together in the new year.

In addition to their dedication to work, Overflow employees are passionate about giving their time, talent and money to causes they care about. It’s part of our culture and how we live our mission.

Through the Overflow Generosity Fund, we’re donating 10% of our annual revenue to charity. This year, employees chose organizations including Bay Area SCORES, ColorStack, Connecticut Humane Society, Help.Online, Meals on Wheels SF, The Trauma Project, and Whatcom Land Trust to give to.

On behalf of all of us at Overflow, I wish you a happy, healthy and successful 2022!

With Gratitude,

Vance, Founder & CEO

Looking Forward to 2022

What else can you do? Enter the millennial generation.

High-earning millennial donors are rapidly becoming a powerful force in charitable giving. There are 618,000 millennial millionaires in the U.S. and their wealth is only expected to grow, according to a report by Coldwell Banker. More importantly, millennials are investing in stocks more than ever before. In 2020 alone, Millennials made up for nearly 20% of the stock market’s trades and investing apps like Robinhood demonstrated that daily trades were up by 3X.

So, how can you tap into this emerging market?

Millennials have surpassed baby boomers to become the largest generation in the country, according to the U.S. Census Bureau. The group — made up of roughly 72.1 million people — ranges in age from 25 to 40, according to the Pew Research Center. This makes this generation more important than ever. Millennials are the first generation of digital natives, so the importance of using technology to reach this group cannot be ignored. To maximize your fundraising efforts, make it easy for millennials to donate stock and other non-cash assets through your online donation page. By providing another way to give alongside cash donation flows enable millennials to think about stock donations in a whole new way.

Providing a digital stock-giving solution creates less friction for donors (Have you ever asked a millennial to fax a form?). It is no wonder why nonprofits that receive stock donations see 55% higher fundraising growth than those that only accept cash. Additionally, creating a digital stock donation solution gives your donors the opportunity to give another way, and opens up a new fundraising channel for your nonprofit.

But, most donors won’t even be aware that donating stock is the most effective way to donate.

How can you educate and reach the millennial donor base on Non-cash assets like stock donations?

Despite their strong interest in philanthropy, most millennials won’t really know about the benefits of stock donations. The best way to educate this donor base is to create empowering explanations that help them learn and understand the benefits of donating stock quickly and easily.

Make sure to add the tax benefits of donating stock to your donation page. For example, most millennial donors won’t know that:


“Donating stock can be one of the most tax-efficient ways to give. By donating appreciated stock that you’ve held for over a year you could potentially save up to 20% in capital gains taxes and potentially deduct the charitable donation on your federal income taxes.”


During Giving Tuesday the primary barrier for a high-value donor gifting stock is the lack of awareness of the opportunity and optionality to donate non-cash assets like stock donations. In addition, they are not aware that stock giving is the most tax-efficient way to give for two reasons:


1). Giving from different assets stored outside of a checking account used for everyday expenses

2). The significant tax benefits stock donations provide, create a win-win proposition for donors.

Stock giving tax education spans three major cornerstones:

Tax Efficiency

Ease of Giving

Maximizing Impact

By incorporating this type of messaging into your campaigns it will maximize the potential for more millennials to donate to your organization. They are by far the most digitally native generation hence it’s important to maintain an online presence across your socials. At Overflow, we're excited to open new ways for nonprofits to fundraise and on GivingTuesday encourage you to join in our #ShareAShare campaign. Try out these messages below to engage with your audience.

Eager to make an outsized impact on #GivingTuesday? Donating stock is the most tax-efficient way to give #ShareAShare.

Make a larger impact on #GivingTuesday by donating stock! #ShareAShare

Donate stock today to maximize your impact and save on taxes. #GivingTuesday #ShareAShare

This #GivingTuesday donate stock through our simple and secure donation page. #ShareAShare

Maximize your impact on #GivingTuesday and increasing your tax savings when donating stock! #ShareAShare

Don't want to wait until #GivingTuesday to support us! Deepen your impact and increase your tax savings today when donating stock.

On Giving Tuesday try tapping into a new fundraising channel through stock donations while engaging with a new generation of philanthropists.


If you’re interested in learning more about non-cash fundraising check out our latest ebook "Stock Donations Guide For Nonprofits" here. 


How To Engage Millennial Donors On Giving Tuesday

The funds raised through our Series A will be used to help Overflow scale across talent acquisition, product innovation, and more, all towards Overflow’s mission of making generosity frictionless.

"Stock donations are the most lucrative and tax efficient way to give, yet it’s the most underdeveloped donation channel. That is why we are beyond excited about Overflow; Vance is exactly the kind of rare founder that can lead the industry."

— Tyler Engh, Founder and General Partner, R7

"We love Overflow’s mission, and are excited about their commitment to democratizing access to equity as a way to do good. Overflow makes it easy for companies to empower their employees to donate to the causes they believe in—before they hit the proverbial jackpot."

— Jeff Clavier, Founder and Managing Partner, Uncork Capital

Origins

Words from our Founder, Vance Roush:

When sharing our story, it’s often prompted by “Vance, how did you come up with the idea for Overflow?” I love this question because it allows me the opportunity to share an ancient proverb found in the Bible (yes, I’m a Pastor— but don’t hold that against me!).

The proverb goes like this: “The World Of The Generous Gets Larger And Larger”.

A simple, yet powerful principle, that launched a whole company.

10 years ago I married the love of my life, Kim Roush. A key thing we agreed on was that we wanted to live a generous life. We aimed to always fight for the bill, intentionally give to our church and community, and live a lifestyle that hopefully inspired others to give. As we put this principle into practice over this past decade, we have seen our life enlarged in ways that can’t be fully explained. Proverb 11:24 captures it so well.

In addition to this, we have had the distinct privilege to be part of the founding team at VIVE Church. We started with 7 people in a living room, and now have 4,000 active members globally. In addition to choosing a principled life of generosity, we saw hundreds of others under their own conviction choosing to do the same, allowing us to witness their lives expand in incredible ways. We don’t give to get something in return, but because when we give, we connect ourselves to something beyond ourselves.


From Principle To Product

In Summer of 2019, I shared with my wife, family and Pastors that I wanted to productize this principle. What if we created technology that facilitated and inspired the world to give? What if we invested into this at the levels of Google and Facebook’s Ad Network or Amazon’s Delivery System? What if giving to your church, university, or causes you care about felt less like a transaction and more like a celebration? What if giving was less like dropping a few coins in a bucket and more like a strategic investment portfolio allocation?

We would unlock giving at unprecedented levels.

A bunch of ‘What ifs’ turned into incorporating Overflow and solidifying our vision of building the infrastructure to make generosity frictionless across every major asset class. And we’re starting with stock. The most under-utilized, but highest leverage fundraising channel, for donors and nonprofits!


What Is Overflow Today?

At Overflow, we believe that people are intrinsically drawn to give, but they don’t always have access to the best tools to do so. Overflow empowers nonprofits and donors alike by creating products that make giving frictionless, elevated, and fun. We are focusing on facilitating stock donations because it is the most underutilized fundraising channel with the highest leverage potential.

Donors are known to be much more generous with stock than with cash. The average stock donation through Overflow is $6,031, which is 47x larger than the average cash donation nationwide.

Currently, Overflow makes it possible for people to seamlessly donate stocks directly to their favorite nonprofits and causes they care about. Most nonprofits deal exclusively with cash donations, yet studies show that only 10% of the average donor’s net worth is kept in cash. This fundamental misalignment is the biggest missed opportunity in the nonprofit fundraising space today—and Overflow is fixing that.

Overflow provides nonprofit organizations with products and services to streamline the donation process. With Overflow, nonprofit organizations receive “The Donor Experience” that is beautifully designed and inspires big giving, a Nonprofit Dashboard to streamline back-office tasks such as reconciliation and executing charitable acknowledgment letters, and an excellent service to roll out this fundraising channel to their donor base in a sophisticated and intelligent way.

Since soft launching in July 2020, Overflow has already attracted 125+ of the top nonprofits & churches in the world to our platform including Meals on Wheels, the Golden State Warriors Foundation, Tipping Point Community, New Story, Baby2Baby, Elevation Church, and Banfield Foundation.


Our Five Year Vision

We foresee that in five years Overflow will allow you to donate any asset class, to any organization, anywhere, at any time. Today, we’re focused on making it possible to donate publicly-traded stocks, but have our eyes on other appreciated securities such as ones being traded on platforms like Robinhood, Coinbase, Rally Rd, Otis, Masterworks and Vinovest— making it possible to give any appreciated gains!

Not only does stock donation maximize the donor’s impact, but it optimizes taxes because nonprofits are not subject to capital gains tax and are able to realize the full market value of the donation. This also means the donor is able to realize the full market value of their donation as a charitable tax deduction. Thereby creating a truly win-win situation for both the nonprofit and donor.

Today, $450B+ is donated to nonprofits to fund the work they do to tackle our world’s most pressing issues. What if we doubled that by unlocking donations from wealth, not just cash on hand? What if collectively we gave $1T+? That wouldn’t just fully fund mission critical initiatives, but that would change us. Because giving is intrinsically valuable. And I believe the ancient proverb is true… the world of the generous gets larger, exponentially.

We'll continue to build for this space until every human on the planet experiences the life of the generous!

Overflow Raises $10M Series A Round to Bring Philanthropy into the Future

For the past six years, Next After has put on the Nonprofit Innovation & Optimization (NIO) Summit to help digital marketers and fundraisers maximize their fundraising potential. This year may be a more critical time than ever, with the changing tide towards virtual fundraising. Marketers are more focused than ever to up level their digital fundraising strategy. The NIO Summit is the place for nonprofit marketers and fundraisers looking to learn more about the latest fundraising innovation to drive real online fundraising growth.

We are proud to announce that we will be joining NIO Summit this year! Come find us at booth B14, where we will be handing out swag, giving live demos of Overflow, and even launching a raffle to win a MacBook Air! That’s right, for our first event ever we thought we’d give away a MacBook Air to one lucky winner!

Here is where you can find us at NIO Summit:

Where: The Palmer Events Center

900 Barton Springs Rd, Austin, TX, 78704

Day 1 Tuesday, September 21, 2021

6:00 PM - 9:00 PM Pre Summit Party

Day 2 Wednesday, September 22, 2021

9:00 AM - 5:00 PM Expo Hall

5:00 PM - 6:00 PM Cocktail Hour

6:00 PM - 8:00 PM Game Night

Day 3 Thursday, September 23, 2021

9:00 AM - 5:00 PM Expo Hall

3:00 PM - 3:15 PM Raffle at Overflow Booth B14

If you’re looking to join our raffle, say hello, or have an in-person conversation just make sure to stop by our Overflow booth. We look forward to seeing you at NIO Summit!


For more information on Overflow, check out the link here. 


NIO Summit 2021: Overflow’s Epic Raffle Prize Awaits You At Our Booth

Spotlight

The World’s Most Pressing Issue Today

Crisis in Afghanistan

Following the collapse of the Afghan state with the takeover by the Taliban, Afghanistan is at the onset of a massive humanitarian crisis. The people of Afghanistan are in need of support for emergency evacuation, relocation, and resettlement operations. Those especially vulnerable include women, human rights activists and defenders, educators, media workers, and ethnic minorities.

In an effort to provide protection and assistance to the people of Afghanistan, Overflow has curated a list of nonprofits addressing the medical and health services support, nutritional needs, including the provision of food and access to clean water, housing resettlement aid to refugees, and general assistance to charities on the ground in Afghanistan.

Charities to Donate to support:

Women for Afghan Women

Mission: Women for Afghan Women (WAW) is the largest women’s organization in Afghanistan that uses a grassroots approach to foster peace and equality by providing essential services to women and children in Afghanistan.

You can help support their evacuation efforts and aid to the thousands of women, children, and families who are under their care here.


CARE

Mission: CARE is a leading humanitarian organization fighting global poverty, with a mission to serve individuals and families in the poorest communities in the world. Drawing strength from global diversity, resources and experience, CARE promotes innovative solutions and advocates for global responsibility.

Donate here to support the much needed emergency aid here.

Good360

Mission: Good360's mission is to transform lives by providing hope, dignity, and a sense of renewed possibility to individuals, families, and communities impacted by disasters or other challenging life circumstances who would struggle to find that hope.

Their goal is to provide critical goods to the right people at the right time during all phases of a disaster. Donate here.


Samaritan’s Purse

Mission: Samaritan's Purse is a nondenominational evangelical Christian organization providing spiritual and physical aid to hurting people around the world

Donate here to support Samaritan’s Purse Airlifts Relief to help evacuees from Afghanistan.

Global Giving

Mission: Global Giving is the first and largest global crowdfunding community that connects vetted nonprofits, donors, and companies in nearly every country around the world. Their mission is to transform aid and philanthropy to accelerate community-led change.

Donate to Afghanistan’s Emergency Fund by Global Giving here.


UNICEF USA

Mission: The United Nations Children's Fund (UNICEF) works in more than 190 countries and territories to put children first. UNICEF has helped save more children's lives than any other humanitarian organization, by providing health care and immunizations, clean water and sanitation, nutrition, education, emergency relief, and more.

Donate to support the nearly 10M Children in Afghanistan Need Humanitarian Aid now.


Lutheran Immigration and Refugee Service

Mission: Lutheran Immigration and Refugee Service’s mission is to protect, embrace, and empower all migrants and refugees in a world of just and welcoming communities.

You can donate to help provide housing assistance, clothing, and other basic needs to the Afghan refugees that are arriving in the U.S. here.

International Refugee Assistance Project

Mission: International Refugee Assistance Project organizes law students and lawyers to develop and enforce a set of legal and human rights for refugees and displaced persons.

Donate here to help IRC continue to provide the Afghan people with shelter, education, clean water, health support and other aid.

International Rescue Committee

Mission: The International Rescue Committee helps people whose lives have been impacted by conflict and disaster to survive, recover, and gain control of their future.

Help AJSC provide safehouses, food, clothes, and basic needs to Afghan journalists still in the country here.

Child Foundation

Mission: Child Foundation is an international charity organization that helps children living in poverty remain in school. The children sponsored through their programs are in great financial need, with many being orphans or children living in emergency situations.

You can donate to support the Afghanistan Crisis Fund for Emergency Assistance here.



Ways Of Giving To Support The Causes You Care About

Stocks  Vs Cash

Many donors are wondering how to best give to the causes they care about. The most common method of donating to nonprofits is usually through Cash/Debit/ACH payments through a nonprofits website. However, cash is no longer king!

Enter stock donations. Donating stock is one of the most underestimated channels that enable nonprofits to maximise their fundraising potential and support their beneficiaries at scale by maximising the full donation amount.

What would you be willing to give if you knew that your donation wasn't coming out of your monthly grocery, rent or childcare budget? What if it came from the Overflow—your stock portfolio? While a $2500 donation from your checking account may feel significant, there is a reframing that occurs when donating from your stock portfolio. Are you giving a $2500 donation or are you giving (1) share of Google stocks that you've had for at least a year, on which you can avoid paying capital gains taxes and exempt the nonprofit?

Did you know?

Donating stock after it has appreciated in value for a year allows you to deduct the full appreciation value from your taxes and protects your realized gains from being subjected to long term capital gains tax, which can be up to 20% of the gains.

If you donate stock that has appreciated in value in less than a year, you can avoid up to 37% in short term capital gains taxes by donating that stock.

Nonprofits are exempt from capital gains taxes, so your stock donation allows the nonprofit to utilize the full amount of the donated funds.

Plus, you also can deduct the fair market value of the stock just like you would a cash donation when you itemize deductions in your next tax filing

This means you can save up to 20% in long term capital gains taxes and 37% in short term capital gains by donating your appreciated publicly-traded stock directly to your favorite nonprofit whilst maximising the full donation amount to the non-profit. Thereby truly creating a win-win situation for both the nonprofit and donor!

Overflow makes it possible to donate appreciated stock and save on taxes, all while supporting the causes near and dear to your heart and making a difference in your community. Get in touch with our team if you're a nonprofit looking to diversify your fundraising capabilities. 

Overflow's Giving Guide 2021 - Vol 1

Why do we do this?

We know how valuable stock donations can be and we know that for many of you, some of your largest gifts are stock. We also know that giving stock can be a complex and tedious process for the donor. At Overflow, our goal is to lower the barriers for stock donations by providing a streamlined online donation experience as well as concierge, white-glove support for your donor throughout the entire process.

How do we do this?

At Overflow, we work hard to ensure that the giving experience is secure, straightforward, and transparent for your donor. We do this through five key pillars of the Overflow Experience.


Concierge-Level Service

Historically, gifting stock has been clunky and confusing, which is why many donors opt to give via cash or credit instead. While we bring online stock giving into the 21st century, Overflow’s designated Stock Gifts Team will work with you and your donor to ensure the giving experience is smooth.

Proactive Communication

We know you’re busy, which is why we provide proactive communication to your donor regarding the gift process timeline (pro tip: it’s different for each brokerage!), gift status updates, and brokerage communication awareness.

Donation Visibility

Overflow supports your donors during the entire giving experience. From the moment your donor clicks into the “Donate Stock” button on your Giving Page through the gift acknowledgement process, your valued donor will have visibility into their gift status through Overflow’s Donor Portal from start to finish.

Gift Acknowledgement

The Overflow Experience doesn’t end after you receive the donor’s gift. We know how important it is to show gratitude to your donors as well as provide them with tools to help them acknowledge their gifts for tax purposes. We make this easy for you by providing pre-filled and customized acknowledgement letters that you can send to your donors at the click of a button.

Stock Giving Education

We know stock gifts are the way of the future. There is too much of an upside for donors and nonprofit for them to not be. We’ve seen that the main barrier hindering a high value donor from gifting stock is not that they don’t hold assets, but that they might be unaware of the potential major tax benefits that donating stock can provide them. This is why we have created content to meet your donors where they are at and provide them with educational resources at all points along a donor’s giving journey.

Do you think your nonprofit could benefit from having a stock donations team dedicated to you and your donors? Book a demo with us today.


Treat your most important donors to the Overflow Experience

What most nonprofit fundraisers don't know about stock donations is that most donors don’t give stock not because they do not hold assets, but because they are unaware how tax-advantageous stock donations can be. In fact, a 2016 study by Fidelity Charitable found that 80% of donors own appreciated assets (like stocks, mutual funds, or bonds), but only 19% of this population has donated these assets to charitable organizations. Overflow is here to help change that and we have some actionable tips on how you can maximize your stock donations by the end of year.


1. Placement Matters! 

We are so used to getting information upfront, that if it takes a donor more than a couple clicks to find out how to donate stock on your website, the likelihood of them actually converting to donate stock dramatically decreases - especially if this is a donor that has never donated before!

If your nonprofit accepts stock donations, this option should be right next to your other online donation options like cash and credit. The more time a potential donor has to spend digging through an “Other ways to give” page, the less likely they are to donate.

Imagine that a donor, Taylor, just watched an incredible video on your homepage about how your organization is helping people experiencing homelessness get vaccinated against COVID-19. Taylor is inspired, feels the urgency of your organization’s mission, and wants to donate.

Taylor is fortunate enough to have worked at Tesla for the last few years and not only is she in the position to donate, but she has the flexibility to donate through cash or stock. To help ensure that Taylor donates to your organization in the way that works best for her, make sure your giving options are obvious and easy to find.

A placement that is obvious and easy to find for stock donations is even more important, as most donors might be unaware your organization even accepts stock! Stock donations are a high-value gift, beneficial to both the donor and the nonprofit. The proof is in the numbers. The average cash donation in the U.S. is $128, whereas the average stock donation through the Overflow platform is $6,031. Don’t miss out on potentially larger gifts by hiding this information at the bottom of your “Ways To Give” page!

2. Educate, then activate

If you have fundraised for stock gifts before, or have even donated yourself, it is probably because you are aware of the significant tax advantages that donating stock can have when compared to cash. Unfortunately, these are still not well known for most donors. This is why it is so important to educate your supporters on why you support this high-value way of giving. We recommend placing educational content recommending stock donations on or near your organization’s Donate Page.

Check out this study below- we asked participants what copy would entice them to donate stock, and the majority would be swayed by understanding the tax savings benefits of their donation.

For example:

Donating stock after it has appreciated in value for a year allows you to deduct the full fair market value from your taxes and protects your realized gains from being subjected to long term capital gains tax, which can be up to 20% of the gains.

Sometimes, creating a narrative can help illustrate your point and appeal to donors.

For example:
Let’s say that generous donor Taylor initially purchased stock a year ago for $5000. Over the last year, her stock has appreciated in value and is now worth $10,000. She has two options if she would like to donate these assets:

Sell the stock and donate the cash value

Donate the stock directly to a nonprofit

If she were to sell the stock and donate the cash value, her donation would be subject to up to 20% capital gains tax, reducing the value she is able to donate by $2000.

If she were to instead donate the stock directly to the nonprofit, her gift would be protected from capital gains tax, and she would be able to donate the full intended value. Not only that, but she would be able to take that entire fair market value deduction off her taxes.


Thus, by donating stock directly, Taylor would be able to:

Give a larger donation because capital gains are protected

Claim a larger tax deduction because of the larger gift, so she would save more on taxes.


To illustrate this example, take a look below:


Yes, telling a story takes up more real estate on your website, but the upside of being able to provide invaluable information as a potential donor progresses through their decision making journey, can ultimately lead to a higher-value donation for you, and a better experience for the donor.

3. Timing is everything.

If a donor does make it to a “Give Stock” page, we’ve seen that many of these pages just provide a DTC number, a vague outline for a Letter of Instruction, and a contact number. The time between when donor Taylor watched that inspiring video and is now deep in your Other Ways To Give page is growing and perhaps her desire to give is dwindling, as she realizes she now must email a contact at your organization for further giving instructions, find the correct Letter of Instruction from her brokerage, print the form, fill it out, sign it, scan it, and fax it to the correct receiving number.

I’m exhausted just thinking about that process.

We are so used to efficiency and things happening at lightspeed, even if Taylor does take the time to do all of these steps… would she do it again?

We’ve thought a lot about this at Overflow, and it has informed how we crafted our entire online stock giving ecosystem, from education, to gifting, to acknowledgement. Have a look at our nonprofit page to see our offerings. If you want to learn more about how online stock donations could elevate your fundraising efforts and make it easier for donors to give these high-value assets to your nonprofit, book a demo with us.


How To Increase Your Stock Donations By Q4

Like many companies throughout the pandemic, we’ve learned a lot in the past year, and are using those lessons to help us grow and pivot as we head into this new phase for Overflow.

When we first launched in July 2020, we had an idea of how we could best serve nonprofits and donors. In our first year, we learned so much more about the nonprofit industry, the incredible nonprofits we serve, and the difficulties presented by the logistics of stock donations. As our product, services and company have evolved to best serve our customers, we were excited to evolve the brand alongside it.

Overflow is making it easy to give any major asset to a nonprofit in order to create a future where generosity is the norm. In a world where we’re told to keep everything we earn, we’re saying give it away.

We want to open the door to new, young, tech-savvy donors who are currently channeling their tech prowess into new trends like alternative investing, and who we think could easily be converted into a new generation of regular donors and budding philanthropists. We knew that, to accomplish this, our visual brand identity had to be forward-thinking, sleek, and approachable, to match our mission.

New Colorways

The fintech space is traditionally serious, straightforward, and devoid of color. We’re changing this narrative, by introducing a new color palette that matches our fresh approach to the industry.

Our new colors represent the new categories of giving now possible through Overflow!

Overflow Brand 2.0 is not simply cosmetic, but an opportunity to communicate the deep beliefs we aim to reinforce by our actions in this next season.

For nonprofits and social impact organizations, we believe that what truly moves the needle is first establishing a culture of generosity that goes way beyond solicitation. It's a relationship inspired by bold vision, cultivated in meticulous execution, and solidified through proven impact. It’s why more than 125 top global nonprofits and corporations in the world have chosen to work with Overflow in its early stages.

Our Brand Pillars

Underlying our brand are our brand pillars—determined by the type of culture we’ve developed over the past year. As our team grows, we intentionally look for these qualities as the character of our team determines what Overflow will become:

Our tone and voice is built of our persona, as if Overflow was a real person. It’s really a reflection of what the team has gone through individually cultivated into one story:


We’re a contemporary of yours who’s figured out the value of giving.

For years now, we’ve been working hard – climbing the ladder, turning the crank, what have you. In doing that, we’ve made progress in our lives.

That progress is something others are impressed by. But to us it just feels like the natural evolution of things. We are where we need to be; where we should be. And, in knowing that, we have made the conscious decision to do more.

That is, to give back some of what we’ve earned.

We give with confidence and poise, but also without ego. Sure, we’ve worked hard and that’s paid off. But, like we said, we are where we need to be.

This world we’re building is for everyone, and we want you to come with us.



Our Manifesto

We’ve integrated our beliefs and the future we want to create in our manifesto which you can view here. It’s a vision for the future after we achieve our mission of truly inspiring the world to give.

Celebration Rather Than Transaction

Our branding and design across our website is focused on changing the way we see generosity.

We have a fundamental belief that the world of the generous gets larger, exponentially. Not simply building the bare minimum to extract value from nonprofits, but to truly serve these world-changing organizations with the boosters they need to inspire their supporters to continue to give big and on a recurring basis—To give out of the Overflow.

Above all, we want to feel genuine. If you look at many nonprofit tools or websites, they feel very transactional. We wanted to move away from that with our branding for Overflow, and create an experience that felt like a celebration rather than a transaction.

Our mission at Overflow is to inspire the world to give, and to make doing so feel inviting, exciting, and elevated – like attending a charity gala – and we wanted our brand to reflect that.

We are excited to continue to serve the philanthropic space for a very long time.

You can learn more about our new rebrand in our recent PR features in Mindsparkle Mag and Graphic Design USA.


Overflow Brand 2.0

Last summer I was sitting in our living room in San Jose with a couple of friends sharing with them a vision to build the future of generosity.

We started mind mapping, specifically meditating on an ancient Proverb: The world of the generous gets larger and larger (Proverbs 11:24 MSG). This verse has been a foundation, first principle in my marriage, and one my wife and I have experienced the power of within our church community. A revelation that has revolutionized our life, and one that has gripped many of our closest friends.

As we unpacked this verse further in our brainstorming session, we created bubbles around words like fragrance, extravagant, and over the top. For Kim and I, we have been on both the receiving and the giving side of generosity. We grew up as first generation Asian American in a low-to-middle class suburb of Seattle called Kent. A city full of immigrants, we were immersed in the hustle with incredible parents who did everything they could to provide us an opportunity to ‘make it’. I remember many days my dad coming home late after a double shift in the grueling aerospace industry and smelling the sweat and fumes from the factory on his clothes. That’s when I experienced that generosity had a fragrance and it smelled like sacrifice.


With that same energy, I followed in my parents footsteps to work all throughout high school and college. I was determined to be able to pay tuition and board at the University of Washington without incurring any debt. Dozens of jobs and scholarship applications later, I finally received my first scholarship at the end of Sophomore year, with many that followed, which would end up paying for the rest of my college tuition, rent, books & more! Even though the scholarships were considered ‘merit-based,’ I definitely didn’t feel like I deserved it. This ‘free money’ felt extravagant and in reflection, was transformative in unlocking opportunities, like studying abroad, because I was no longer tied down with 3 jobs.

Post graduation, Kim and I (newlyweds at the time), moved to Silicon Valley to start our careers in tech (Google) and education (Teach for America). As a ‘Noogler’ in 2011, I definitely went in expectant, due to all the articles I read about Google’s perks, but as I toured the campus on orientation day I was still completely taken aback by the abundance of food and generosity with services such as massages, dry cleaning and G-Buses that picked you up anywhere in the Bay Area. All I could think was that this was over the top.

I know some have a similar journey to me but many more don’t. I also know that each life changing opportunity I have been blessed with, was ultimately a result of generosity. Everyone won’t have the chance to attend a 4 year university, to study abroad or to work at a top tech company, but everyone should have the chance to experience generosity. The FRAGRANT, EXTRAVAGANT, and OVER THE TOP kind.

We believe we have been given so much, and can’t help but grow in the conviction and responsibility to give back, unlocking opportunities and access for others. Giving rooted in gratitude is what we call giving out of the Overflow. It has nothing to do with what’s in your bank balance and what you don’t have, but everything to do with recognizing what you’ve been given and what you do have. From that place, our mission is to inspire the world to give.

We’re starting with stock-based giving, but not stopping there. We will unlock every major asset class until anyone, anywhere can give anything to the people & causes they care about so that every human being will experience the enlarged life of the generous. The Proverbs 11:24 life.


With Love,


Vance, Founder & CEO of Overflow













Why I Started a Fintech Company Focused on Generosity

Many donors own and want to own stock as an asset of their wealth. Research has shown that 80% of affluent and high network individuals own appreciated assets, such as stocks, mutual funds, or bonds, but only 21% of those donors have contributed these types of assets to charity. It is one of the most untapped opportunities for both donors and nonprofits.

However, the number is rising very quickly with over 50% of all charitable donations coming from non-cash assets between 2017 to 2020. Firstly, due to the stock market growing at a steady pace over the last couple of years, even despite fluctuations in the market.  Secondly, because many tax-savvy donors have learned that stock donations are the most tax efficient way to give whilst maximizing the donation.

The most successful nonprofits have captured this opportunity by educating donors and providing the technology to make stock donations, frictionless.


Donating stocks directly to nonprofits allows donors to give more, make a bigger impact, and save money all at the same time!

How does stock donations work for a Donor?

Meet Alex, a Designer at Apple.

He wants to make an impact beyond his day job and has been recently compelled by initiatives within his local church to do what he can to fight social injustice. He has recognized how fortunate he has been in his career and wants to give back.

Alex could make a donation the standard way: donate $10,000 in cash to a nonprofit directly.

Alternatively, he could try a different form of donations.  He could donate from his stock portfolio (thank you for Apple stock grants!) where he will benefit from significant tax savings.

Let’s compare two options from Alex’s stock portfolio.

Alex has two options:

1). First sell his stock and then donate the cash to a nonprofit organization.

2). Donate his stocks directly to the nonprofit organisation.

If he were to first liquidate and then donate his stock, this would mean his donation would be taxed by up to 37% by the government through the capital gains tax. A capital gains tax is a tax on the profit made from the sale of a non-cash asset like stock. But by donating the stock directly Alex is able to minimize his capital gains tax and maximise the value of the donation to the nonprofit.

To summarize, donating stocks directly for Alex means:

A larger donation because capital gains are protected, which means Alex has a bigger impact with his donation.

A higher tax deduction because of the larger donation, which means more tax savings for Alex.

Thereby creating a win-win situation for both the nonprofit and the donor!

In this example, $1,850 was the specific additional value here. For many nonprofits, this is a game changer.

New Story could use $1,850 to pay the rent for a family facing eviction during COVID-19.

StreetCode Academy could use $1,850 to buy a laptop with internet & coding courses for 3 Black & Latinx students who don't currently have access.

So why don’t people currently donate this way? The process is too manual with the necessity for donors to print out forms and send them through the mail to their brokers. With technology advancements, such as Paypal, Stripe and Cash & Credit it has made financial transactions instantaneous and so much easier.

Donors don’t want to have to call or message their brokerage, fill out physical forms, fax in paperwork, and try to contact the nonprofit for their DTC information. It’s time for the donation process to evolve into the 21st century!

Making a donation through stocks is possible for anyone. Tens of billions in value is transacted each year through direct stock-based donations already. But it’s concentrated and limited to high-net worth households with financial advisors who handle these transactions for them.

That changes now. With Overflow you can give some of your stock today in just under two minutes.

Who should use Overflow?

We are calling all tech employees with RSUs, business professionals with employee stocks, and the general public invested in the market i.e. ETFs to consider sharing your shares.

The future that we will create is one with equity!

We call it: Equity For The Inequitable.

Why Donate Stocks to Nonprofits Directly?

New Story: No Place Like Home

Unlike other housing non-profits, New Story doesn't just "build homes for the homeless" as this approach has long proved to be inefficient and unsuited for inclusive community-building. 

Each New Story project is based on three core principles:

A Home That Takes 24 Hours to Print

Right at this moment, over 1 billion people have no access to housing or adequate shelter. Traditional construction methods failed to solve the homelessness crisis. Governments and non-profits failed to solve it either. To address global homelessness better and faster, New Story has been working on a breakthrough technology that makes it possible to build a house in just 24 hours.

In 2019, New Story announced that they were officially building the world’s first 3D-printed community. The first set of 3D-printed homes was based in Tabasco, Mexico, and featured 50 resilient, 500 square feet homes constructed by ICON, a construction technologies company, and ÉCHALE, New Story’s nonprofit partner in Mexico.

The members of the newfound 3D community came from an underprivileged indigenous population that had often been left out of the government programs. Born into extreme poverty, the families have now moved into their new homes that feature two bedrooms, a living room, kitchen and bath. Because Tabasco is often affected by earthquakes and tropical storms, New Story ensured that the houses were built with the highest safety standards and strong foundations that would make them last for generations.

Commitment to People, Transparency and Change

As a part of its commitment to transparency, New Story operates on a 100% model − you always know how exactly your donation was used and which family you helped. To make the giving process fully accountable, New Story separates all donations for homebuilding from their operational expenses and even their work in innovation.

Every dollar you donate to fund a home has a direct impact for a family in need. After you make a donation, you get to follow the New Story team every step of the way — you will receive frequent updates on the home building process and once the house is finished, New Story will introduce you to the family that will be moving into their new home.

While New Story is innovating how communities are built, Overflow is focused on innovating how communities give. With the help of our stock donation platform, we are building a world we all want to live in — a world where all people have access to education, healthcare and housing. However, such a world can only become possible if we fund it.

As a society, we don't have a shortage of solutions or resources, we simply need to help those with abundance to give out of the overflow.

What if we could inspire a whole community to give towards building another community? What if those with appreciated stock donated a part of it to help us build a world without homelessness?

That's possible now with Overflow. 

Nonprofit Spotlight: New Story

When assets are donated directly to nonprofits, donors not only receive a larger deduction, but the nonprofit also receives a larger donation.

How does that compare to selling your cryptocurrency or stocks and then donating the cash proceeds? If you sell your appreciated cryptocurrency, most countries require that you pay capital gains on the appreciated amount which can often range from 20-30%. That means you’d have to pay that tax and then donate the after-tax proceeds, meaning a smaller donation.


Before we start - here are some terms you need to know:

Capital Gains Tax: a tax on the profit realized on the sale of an asset.

Fair Market Value: the price that an asset would sell for on the open market

Cost Basis: the original value of an asset for tax purposes, usually the purchase price.

Below we will break how and why you should donate assets like cryptocurrency, stocks, real estate, and art.

How Can I Donate Cryptocurrencies to Charity?

In the US, the IRS classifies cryptocurrency as property. Similar to other property donations, that means the donor does not have to pay the capital gains tax they would otherwise owe and claim a fair market value deduction. That can often mean a 20%+ larger donation and deduction. Donating bitcoin directly can benefit both the donor and the nonprofit, by bypassing the capital gains tax.

By donating bitcoin to nonprofits directly, the tax deduction is equal to the fair market value of the donated cryptocurrency amount. The charity will receive the full value of the gift because capital gains tax does not have to be paid by a nonprofit which is a tax-exempt organization.

Does your nonprofit accept cryptocurrency donations? Check out The Giving Block to learn more.

How Can I Donate Securities and Stocks?

Giving appreciated stock is up to 20%+ more tax-efficient than cash at zero additional cost to you. Donating stock directly protects capital gains tax, which means a higher tax deduction for you, and the nonprofit can receive the full value of your donation. It’s a win-win situation.

If appreciated shares are sold first and then donated, capital gains tax must be paid. Donating appreciated assets keeps the most money going directly to a nonprofit.

Appreciated securities that have been held for over a year are eligible to deduct at fair market value instead of cost basis, which allows for higher deductible amounts. This also will not trigger capital gains tax.

Does your nonprofit accept donations of stocks or securities?  We automated the charitable stock donation process, eliminating the need to coordinate with brokers or financial advisors and reducing the transfer process from weeks to days. Overflow makes donating public stock quick, frictionless, and secure.


How Can I Donate Real Estate to Nonprofits?‍

Holding onto highly appreciated real estate for over a year? Consider donating it to a donor-advised fund or charity, especially if the property is easy to liquidate, market, and is debt-free. This will avoid triggering the capital gains tax and allow for fair market value tax deduction for the donation.

It is imperative to value your property accurately, before donating directly to nonprofits. If your property is worth more than $5,000 it must be appraised by a qualified appraiser. If the deduction is greater than $500,000 the appraisal must be attached to your tax return.

If the real estate market is down but your property still holds great value, donating your real estate directly to nonprofits is a great way to divest yourself of the property. As always, consult your tax advisor if you are interested in donating property to a nonprofit.

How to Donate Art to Charity?

To get a deduction equal to the fair market value of the work it must be donated to a public charity or private operating foundation. The donor also must anticipate the charity will be able to use the work “related” to its exempt purpose.

Similar to real estate, you must determine the fair market value of the art. If your art is worth more than $5,000 it must be appraised by a qualified appraiser.

The most difficult part of donating art to charity is filling out the related-use requirement. Related use means that the art donated directly to the nonprofit is being used in line with their mission. For example, you can donate a painting to an art museum to be used as an educational tool.

The organization that receives the art donation must use the art as the relevant use for at least a year, before changing its use. If the art is valued for more than $5,000 then that changes to 3 years.




Why Are Direct Asset Donations Better for Nonprofits?

The bottom line is that donating assets directly to a nonprofit is better for the nonprofit and the donor. The donor avoids the capital gains tax and gets a larger deduction while the nonprofit can retain the full amount since they are a tax-exempt organization.




How To Donate Non-Cash Assets to a Nonprofit and Save on Your Taxes

Like many other non-profit organizations affected by COVID-19, this non-profit had to bring its typically large, in-person gala into the digital world.

To ensure the virtual gala would be just as successful, the nonprofit doubled down its digital and social media marketing efforts, sent personalized invitations, and created an engaging virtual experience. Most significantly, it launched a spectacular digital presentation to highlight its ambitious initiatives and high-impact projects.

One such project was a partnership with Tesla and the Tesla Semi truck, designed to serve as a portable assistance centre for community support and disaster relief efforts.

A "Track the Truck" app connected to the Semi would help donors find immediate opportunities to get involved with as well as follow the truck's movements during deployment, allowing donors to track in real-time the impact of their donations.



What best practices can your nonprofit take away from this virtual fundraising success story?

Create a buzz around the event and personalize all invitations.

Incorporate a "year in review" session to celebrate everything that your nonprofit has accomplished the year before to illustrate your organization's impact.

Invest in the marketing platform and the media you will use to tell your organization's stories and testimonies. High-quality media is the key to fundraising success!

Use concise and compelling language, original slogans, and themes to make the fundraising initiatives exciting and memorable.

Create a clear and significant ask connected to what it will take to achieve all of your upcoming endeavors.

Educate donors on all the different ways to give, especially non-traditional ways of giving such as stocks, which can unlock significant tax benefits for both donor and nonprofit.

And finally, make it easy for your donors to give! A confusing or difficult donation flow is the number one reason for low fundraising volumes.

Why choose Overflow as a fundraising platform?

The Overflow onboarding process is easy. To accept your nonprofit's first online stock donation, all you need is to add a 2-lines of code to your nonprofit's website!‍

In addition to stock donations, Overflow offers ACH and debit/credit payments at-cost so that you can avoid the typically marked-up 3% fee for such transactions. ‍

In addition to the net new stock donations, Overflow enabled this nonprofit to save over $20,000 in credit card transaction fees. ‍

Overflow makes it easy for donors to give more. It is no wonder why nonprofits that receive stock donations see 55% higher fundraising growth than those that only accept cash. Diversify your fundraising, increase your average donation amount, and attract net-new stock donors using Overflow's easy-to-use online donation platform.

Book a demo today with our stock donations team to tap into this opportunity! 



Nonprofit Success Story: Raising $3.4M with Overflow

Over the past decade, the United States has emerged as the most generous country in the world. Every year, around 80% of Americans donate to charity, with an average contribution of $2,500. In fact, last year the charitable giving in America reached a record high as the non-profits successfully raised close to 450 billion dollars.

It may come as a surprise, but most of these donations came from individual households rather than multimillion-dollar corporations. But why do so many Americans donate to charity?

While helping others has always remained the number one reason for charitable giving, the second-best reason usually becomes clear once the tax season kicks in. Donations to charities and nonprofits are considered to be tax-deductible so claiming your contributions as itemized deductions can significantly reduce your tax bill. However, what taxpayers often don't know is that donating stock can yield even more tax benefits.

Why is it better to donate stock instead of cash? Why do some investors donate their best stock holdings to charity? Overflow talked to professional investors and regular taxpayers to learn why they decided to quit cash and donate stock to their favorite charities:


Donating stock can maximize your tax benefits

Stock donations will bring you substantial tax benefits if you've held the stock for more than a year and plan to claim itemized deductions.

Imagine that last year you bought a dozen of Tesla shares for $30,000 and that today they are worth twice as much. If you donate the entire amount to a charity of your choosing, you can claim a charitable donation deduction of the current market value of the shares — the full $60,000!

Depending on your tax bracket, such a donation could generate anywhere from $9,000 to $22,200 in tax savings. The higher your tax bracket is, the larger your tax deduction will be. This way, you'll cut your tax bill by $22,200 when you only paid $30,000 for the original shares.

In addition, when you hold on to a stock for more than 12 months, you'll have to pay a tax on its appreciation amount. But if you donate the stocks instead of selling them, you won't have to pay any tax at all! This is why many investors prefer to donate highly appreciated stock in order to maximize their tax benefits — such a donation will result in a larger itemized deduction and no capital gains tax.

Giving stock is the only way to minimize capital gains tax

Ever wondered how you can minimize paying taxes when you decide to sell your stock options? Imagine a scenario in which you sell your long-term appreciated stock first and donate the proceeds to a nonprofit. After selling the stock, you will have to pay a capital gains tax, which can be anywhere up to 37% depending on your tax bracket.

As a result, you will end up paying a massive tax and making a donation that can be up to 37% less than you would have made had you donated your investments directly to the charity.

Giving stock directly to nonprofits can help you avoid paying a capital gains tax and make a bigger donation.

The nonprofits you donate to won't face any tax liabilities either — charities are exempt from any income tax.

Stock donations help nonprofits grow faster

Donating stock can bring a lot of advantages to the nonprofit themselves. For nonprofits, accepting stock contributions will open the door to higher donation volumes and a larger donor market. Besides, charities that accept stock donations and other non-cash gifts usually grow 55% faster than the ones that don't. Why? Turns out that people who invest in stocks tend to give bigger and more frequent donations due to the appreciation of their shares and numerous tax benefits.

Forget about transaction fees for selling stock

Tired of paying brokerage fees and commissions when you sell your stock shares? Then I have good news for you! When you donate stock to charity, you won't have to pay any transaction fees for that sale. Although certain brokerage fees may still apply.

This way, when you choose to donate stock rather than cash, you can avoid transaction fees for selling stock and make a larger gift to your favorite charity.

Donating stock is easier than you think

Long gone are the days when donors had to spend hours filling out complicated documents and mailing their donation paperwork. Donating stock used to be a truly tedious process and after we had to learn the ins and outs of it ourselves, we decided that we've had enough.

That's when Overflow was born. If you’re a nonprofit, book a demo with our team to learn more today.

The Benefits of Donating Stock for Donors

Overview:

In 2021, the S&P 500 index is expected to increase by at least 6%.

The rise of the stock market will lead to investors paying more capital gains taxes on their appreciated securities.

Since donating stock is one of the few ways to avoid capital gains tax, charities and nonprofits will receive even more stock donations, as investors will be looking to donate their appreciated stock shares to offset their gains.

What will happen to the stock market in 2021?

According to Wall Street experts, 2021 will be a great year for the stock market. Many investors are hoping that the vaccine rollout coupled with generous stimulus packages will help stabilize the world economy, encourage the opening of borders, and accelerate economic recovery.

Analysts at Goldman Sachs believe that the S&P 500 index will rise by over 15% due to increased corporate profits and a low-interest rate, highly favorable for the US corporations. The experts at Morgan Stanley and Wells Fargo are less optimistic in their claims: they believe that the S&P will only rise by around 6% — however, this is still a great upward trend for the stock market considering the tumultuous year caused by the COVID-19 pandemic.

The overall earnings of the S&P 500 companies are expected to grow by about 23% in 2021 compared with 2020. The oil prices are estimated to increase as well: the countries all around the world will begin to rebound from COVID-19 leading to the oil demand to rise. 2021 is also likely to be a big year for cryptocurrency, as some traders and analysts believe that Bitcoin could potentially hit a high of $318,000 by December 2021.

So, what does the rise of the stock market mean for donors?

What is the number one downside of appreciated stock shares and securities?

Capital gains taxes that can cut your investment income by as much as 37%.

If some of these predictions are true, at the end of this year, many investors will have to rebalance their stock portfolios to offset their capital gains.

There are two main ways to do this. To realize their losses, investors can sell their assets at a loss — however, if the said stock shares increase in value later on, investors will be missing out on potential growth stocks by selling them in order to decrease their capital gains.

This is why the best way to offset one's capital gains is to donate stock to a charity of their choosing. When investors donate appreciated stock to charity, they will avoid paying the capital gains tax and receive a tax deduction for the fair market value of the shares.

What will growing stocks mean for charitable giving?

Donating stock to charity is becoming the new normal of the philanthropy world.

Since donating stock is one of the few ways to avoid capital gains tax, 2021 will bring even more stock donations to charities and nonprofits, as more investors will be looking to offset their capital gains.

Around 80% of all U.S. donors own appreciated stock or securities, which makes stock donations a lucrative opportunity for charities to maximize their fundraising potential. However, even though more than half of Americans now own stock, over 1 million charities and nonprofits in the US still can't access non-cash donations, such as appreciated stock.

How can Overflow help?

Overflow is a frictionless solution to help charities accept online donations of publicly-traded stock. Our platform has automated the transfer of shares to help your nonprofit organization directly accept stock donations. When your donors donate stock through Overflow, all they need to do is to visit your nonprofit's donate page, connect to their brokerage account and select the shares they want to give. Overflow will take care of the rest!

Our onboarding process is easy. To accept your nonprofit's first online stock donation, all you need is to add a 2-lines of code to your nonprofit's website!‍


Book a meeting with us to maximize your year-end giving appeal today!



*The information provided on this website does not constitute professional tax advice; instead, all information and materials available on this site are for general informational purposes only.


Stock Market Predictions for 2021

Claim tax deductions

Charitable giving. If you want to significantly cut your tax bill, you can deduct up to 50 per cent of your adjusted gross income when you make charitable contributions of cash, property and stock to charities or nonprofits. Remember to itemize your deductions and always keep your donation receipts!

Educational expenses. If you are a student, you can claim a tax deduction for your tuition fees and other educational expenses.

Medical bills. You can deduct medical expenses from your tax bill, but only if they amounted to more than 7.5% of your adjusted gross income.

State and local taxes. You are allowed to deduct state and local income or sales taxes from your taxable income, but your deduction will be limited to a combined total of $10,000.

Retirement account contributions. Make sure that you deduct all the contributions you made to your individual retirement account or your self-employed retirement account.

Donate appreciated stock

For those taxpayers who itemize their deductions, donating stock to charity can be the most effective way to decrease their tax bill. Consider donating the stock shares that you’ve held for over a year and that have increased in value — that is, long-term appreciated securities.

When you give stock to charity, you can deduct the fair market value of the shares and avoid paying the capital gains taxes on the appreciated value of those shares. If you had sold the shares first and then donated the proceeds to charity, you would have paid the capital gains tax, which would lead to a smaller charitable contribution and as a result, a smaller tax deduction.


Sell depreciated investments

When it comes to donating stock and securities to charity, it only makes sense to donate appreciated stock shares — donating securities that declined in value will not bring you any significant tax benefits.

However, if you sell the depreciated stock shares first and then donate them to charity, you will be able to create valuable capital losses to offset your taxable gains. This strategy is called “loss harvesting” — realizing your losses and offsetting your taxable gains by selling depreciated investments.

Open a donor-advised fund

A donor-advised fund is an excellent tax-saving strategy that will help you support the charitable organizations you care about while also receiving the tax deductions necessary to decrease your tax bill.

Here's how such funds work:

First, you open your donor-advised fund and donate cash, securities or other assets. After making a contribution to your fund, you will receive a federal income-tax deduction for the year when you made a donation. Afterwards, you advise the fund to make donations to your preferred charities either in the same fiscal year or anytime in the future.


‍Contribute to retirement accounts

The truth is, there might not be a better tax-saving strategy than investing in your own retirement account. In fact, contributing to a company-sponsored 401(k) plan is often the best way to save on taxes while also ensuring your future financial security since many employers tend to match such contributions.

In addition, contributing to an IRA also reduces your taxable income for the year. However, remember that you can contribute a maximum of $6,000 to an IRA and an additional $1,000 if you are 50 or older.

If you're registered as self-employed, consider enrolling in the Keogh plan — a tax-deferred pension plan that accepts contributions until the tax filing deadline and not the end of the fiscal year.

‍Choose the right filing status

There are five tax filing statuses: single, head of household, married filing jointly, married filing separately, and qualifying widow or widower. Your filing status can determine how much you pay and owe in taxes as certain statuses have more tax advantages as the others.


For instance, the couples that choose to get married before December 31st will be eligible to file a joint return for that tax year. According to Business Insider, "there are a few major benefits to married filing jointly, including access to valuable tax credits, a larger standard deduction, a larger capital loss deduction, and combined incomes, potentially bringing a higher earner into a lower tax bracket.



End of Year Checklist for Tax Payers

Retain And Engage Donors

Did you know that 3 out of 4 new donors acquired by your nonprofit will never make a second donation? A significant challenge that all nonprofits face is how difficult it is to retain and continuously engage their donors long term. The average donor retention rate varies from 20 to 29%, so raising that number by a few percentage points could result in thousands of new donations for your nonprofit.

There are a few things you could do to increase your donor retention:


Build a relationship with your donors before asking for a donation.

Be transparent about your nonprofit's mission and always show how your nonprofit will use the gift.

Tell impact stories of the people or causes that your organization has helped.

Use your website and social media as a way for donors to personally connect with your organization and learn more about your work. Your social media accounts should be as personal and trustworthy as possible — stay away from cliché phrases and corporate tone!

“The average donor retention rate varies from 20 to 29%, so raising that number by a few percentage points could result in thousands of new donations for your nonprofit.”

Access Government Funding

Even though Americans donated over $440 billion to charity last year, many nonprofits still depend on government assistance to fund their programs. Government funding can come in various sources and forms, such as grants or matching gift schemes. It may serve as a safety net to support the charities experiencing fundraising difficulties.

However, as the federal and state budgets continue to decrease, it's becoming increasingly more challenging for nonprofits to secure government funding, while some charities receive no assistance at all.

Here are some things your nonprofit can do to stop relying on government funding:

Provide donors with multiple giving options (such as monthly or annual gifts) as well as the opportunity to "commit" to a specific gift in the future in case they're not ready to donate now.

Diversify your fundraising strategy to expand your charitable efforts. Encourage your donors to give more than just cash. Stock donations are on the rise, so giving your donors an option to donate stock or other appreciated securities will maximize your fundraising potential.

“Make it easy for your donors to give more. Nonprofits that receive stock donations see 55% higher fundraising growth than those that only accept cash.”


Accept Stock Donations and Bitcoin

Did you know that over 1 million charities and nonprofits in the US can't access non-cash gifts such as securities, cryptocurrencies, and stock? For years, stock donations have been one of the most convoluted ways of giving, making it accessible primarily to wealthy donors or donors with wealth management advisors.

Donating stock to charities has been a complex process that requires donors to spend up to weeks working with their brokers and financial advisors, filling out paperwork, and waiting for their documents to be accepted.

For charities, the process of receiving a stock gift can be just as tedious. To receive a stock donation, a charity must work with each donor individually to send and process the stock donation form, track and record each gift, send the acknowledgment letter, and ensure that the paperwork is correct for both parties.

Considering how many operational expenses nonprofits have to face, accepting stock donations used to be an expensive and time-consuming process that many organizations couldn't afford.


“ Over 1 million charities and nonprofits in the US can’t access non-cash gifts such as securities, cryptocurrencies, and stock”.

How Overflow can help

‍Overflow is a frictionless solution to help charities accept online donations of publicly-traded stock. Our platform has automated the transfer of shares to help your nonprofit organization directly accept stock donations.

With Overflow, your donors will no longer need to coordinate with brokers or financial advisors. All they would need to do is to visit your nonprofit's donate page, securely connect to their brokerage account, and select the shares they want to give. Overflow will take care of the rest.‍

‍Book a meeting with us to maximize your year-end giving appeal today!


3 Fundraising Challenges Nonprofits Face And How To Overcome Them

Why Stock?

The stock market is now on the rise, and stock giving is growing faster than ever. Around 80% of all U.S. donors own appreciated stock or securities, which makes stock donations a lucrative opportunity for charities to maximize their fundraising potential. In fact, stock donations are becoming one of the most promising fundraising channels, compared to the traditional donations of cash, credit or goods.

Why should nonprofits accept stock donations?

According to Bloomerang, wealth is not held in cash — instead, people tend to have the majority of their net worth stored in non-cash assets, such as stocks, bonds and real estate. In fact, cash comprises less than 10% of the collective assets and wealth owned by Americans. This means that if your nonprofit only asks for cash gifts, you’re ignoring 90% of your potential donations.Why are donors more generous with stock than cash?

Why are donors more generous with stock than cash?

Nonprofits that receive stock donations see 55% higher fundraising growth than those that only accept cash. Stock gifts tend to be larger than traditional donations, so the charities that accept stock donations often see a significant increase in their total giving within three months  — without having to attract new donors, as the majority of your nonprofit's current donor base already owns stock!

Why? The reason is quite simple: donating stock helps your donors save big on their taxes and make a bigger donation to charity by minimizing their capital gains tax. When selling stock shares, investors have to pay a 37% tax on the appreciated value of the shares — even if they intend to donate the proceeds to charity. However, when donors donate stock directly to charity, the stock shares are transferred to your nonprofit and retain their full value while investors don't pay the capital gain tax and get a tax deduction for the fair market value of the shares.

Why are stock donations becoming popular among donors?

For years, stock donations have been one of the most convoluted ways of giving, making it accessible primarily to wealthy donors or donors with wealth management advisors. Even though more than half of Americans now own stock, over 1 million charities and nonprofits in the US still can't access non-cash donations.

This is because accepting stock donations used to be a highly complicated process as well. To receive stock gifts, charities had to work with each donor individually to send and process the stock donation form, track and record each gift, send the acknowledgment letter, and ensure that the paperwork was correct for both parties.

However, this is no longer the case. Overflow has revolutionized the stock donation process, making it easy for both donors and nonprofits.

‍Why choose Overflow as a fundraising platform?

Overflow is a frictionless solution to help charities accept online donations of publicly-traded stock. Our platform has automated the transfer of shares to help your nonprofit organization directly accept stock donations. When your donors donate stock through Overflow, all they need to do is to visit your nonprofit's donate page, connect to their brokerage account and select the shares they want to give. Overflow will take care of the rest!

Our onboarding process is easy. To accept your nonprofit's first online stock donation, all you need is to add a 2-lines of code to your nonprofit's website!‍


Does your nonprofit already accept stock through Overflow?

If yes, read our guide below to increase your donations, make the most of your fundraising efforts and maximize your nonprofit's net-giving with stock gifts!

1. Set up your brokerage account and investment policy

Before your nonprofit can start accepting stock donations, there are two main steps you need to take. First, you will have to open a brokerage account with a low-fee firm such as Schwab or TD Ameritrade. Keep an eye on the brokers that offer special deals to nonprofit organizations, as this will enable your charity to save even more money.

Afterward, your charity will need to establish a formal investment policy that will determine whether your nonprofit will sell the stock shares as soon as it receives the donation or hold onto the gifted shares until their value increases.


2. Advertise stock donations in email campaigns

There are two ways you can use email campaigns to promote stock donations among your donors.

Option 1: Plan an email campaign announcing that your nonprofit is now accepting stock donations and send it to your entire donor community at once. This will help you make sure that each one of your donors knows that your nonprofit accepts stock and can do so easily.

Option 2: Analyze your donor base to figure out which of your donors are most likely to own and donate stock. Use this data to create customized email campaigns that target your donors when the stock market is on the rise or when it's time for investors to assess their tax liability for the year and balance their portfolios. Book a meeting with us to see how Overflow can help you with that!

3. Promote stock donations on your website

When your donors visit your nonprofit's donation page, "donating stock" should be listed as one of the main giving options. There are two ways you can advertise stock giving on your donation page — you can either use the Overflow Button or create your own design that highlights various donation choices.

Here are the two most commons examples of the donate stock buttons:

It's important to let your donors know that your nonprofit accepts stock gifts as soon as they visit your donation page — this way, you can make sure that your nonprofit is getting the biggest gift possible!

Sometimes, it can also be beneficial to provide a couple of quick facts on why stock donations bring more tax advantages than cash. Here is a sample copy that you could include:

Donating stock to charity is one of the most tax-efficient ways to give! Because stock donations will help you minimize your capital gains tax and make a bigger donation to [the name of your nonprofit].


4. Use the power of social media

Your nonprofit's social media channels can become a powerful tool for promoting stock donations among your donors. Here are a few things your nonprofit can do to educate your community on the importance of stock donations:

Share links to the articles on stock donations to teach your followers how to avoid capital gains tax, decrease their taxable income, and receive a bigger tax deduction.

Participate in fundraising campaigns such as #BitcoinTuesday. In 2020, over 120 charities participated in #BitcoinTuesday raising millions of dollars in crypto donations, so why not plan a similar fundraising campaign targeting stock donations?

Announce each stock donation on your social media channels and make sure to include how much tax savings was generated by each particular gift. For example, if a donor made a $10,000 donation to your charity, mention that they were able to save up to $3,000 in taxes (30% of the stock's appreciation value).

Join the social media conversations happening around the stock market. Pay attention to trending posts and encourage your donors to donate stock when the market is on the rise.

5. Host a Happy Hour for stock donors

Whether it's an in-person gala or a virtual gathering, hosting a fundraising event celebrating your stock donors can become a valuable addition to your nonprofit's fundraising strategy. As stock gifts tend to be 15 times larger than traditional donations, a successful "Stock Happy Hour" could help your charity raise thousands of dollars in stock donations alone!

Since most of your donors already own some sort of stock or cryptocurrency, you can advertise this event through your usual outreach channels, such as your website, email newsletter, and social media. Don't forget to describe all the benefits of stock donations to attract those donors who never donated stock before!

6. Show the impact of each stock share

When you take into consideration that $128 is the average online donation amount, for many donors, a $3,000 cash donation may seem like a big commitment.

But did you know that $3,000 is the current price of just one Amazon share? And that your donors can have dozens of such shares in their portfolio?

By giving a single Amazon share to Larkin Street, a donor could provide 6 young people with paid internships. It's useful to illustrate how an individual stock share could impact your nonprofit's programs and communities in need — this way, it will be easier for your donors to realize the philanthropic potential of their stock portfolio.

If you're interested in capturing the opportunity stock donations provides for your fundraising capabilities - book a demo with our stock donations team below.





Ultimate Guide to Accepting Stock Donations for Nonprofits and Charities

The Current Process of Donating Stock

For donors, donating stock is the most tax-efficient way of giving. But if you wanted to donate stock to a charity how would you go about this?


Let’s break it down:

First, you will need to contact the nonprofit’s giving team to ask if they accept stock donations and their donation process. If they do, the nonprofit will provide you with their account information and brokerage number.

Then, the nonprofit would need to contact their broker for their stock donation process forms. The forms can vary, so ensure you ask your nonprofits broker for advice on the full process.

Once you have the forms you then need to print them out and fill them in. To ensure there are no errors you may need to follow up with the nonprofit to confirm their details.

Send your charitable stock transfer form via mail or fax to the nonprofit’s brokerage to initiate the transfer. If the broker provides you a confirmation number, make note of it so you can reference the transaction in case any issues arise later on.

The nonprofit receives its stock gift in its brokerage account. In most cases, it will be anonymous. Unless you have notified the charity of the donation.

You will then receive a charitable acknowledgment letter for your records if the nonprofit was able to match their gift to the donor.

As you can see the manual method of donating shares can be tedious and time-consuming. It involves a lot of paperwork and constant back and forth between the donor and the nonprofit. Above all, it realised the actual necessity of mailing or faxing. This method of communication is still living in the 20th century.

There must be a faster way?

The Overflow Process of Donating Stock

At Overflow we make donating stock frictionless through our secure portal. You can now donate stock in less than two minutes. Overflow is free for donors to use. Our partners include the likes of the World Food Bank, Tipping Point, Newstory and hundreds more!

Here is how it works:

1). If we have partnered with the nonprofit you will see the “Overflow” or “donate stock” button on their website.

2). Once you click on the button you will be directed to a secure and end-to-end encryption portal.

If you’re a first-time donor you will need to make an account to connect with your broker. It will take you less than one minute.

3). Select your broker and choose the share you want to donate. The transaction is then executed securely through our system. Without the need to print and send forms.

In less than 2 minutes you have donated your stocks to a nonprofit organization you care about.

Fast and frictionless.


The Benefits of Donating Stocks Directly for Donors

For the donor, donating stocks directly allows you to give more in value, make a bigger impact, and save money at the same time. In short, giving appreciated stocks directly to a nonprofit is up to 37% more tax-efficient than a cash donation. The reason being is that when you donate stocks directly to a nonprofit, neither the donor or the nonprofit will have to pay the capital gains tax on the donation. At the same time, you will receive the tax receipt for the fair market value at the time of donation. For example, if you want to make a $10,000 donation you have the option now to donate the value of that donation directly through stock to the nonprofit while you benefit from significant tax savings.

Donating stock may not be the first thing that most donors would consider when planning on making a charitable donation. But, giving stock to a nonprofit ensures you maximise the impact of your donation, whilst minimizing the capital gains tax implications. It is by far the most tax efficient way to give.

If you’re a non-profit organization and are interested in activating stock donations as a new fundraising channel - book a demo with our team!



How to Donate Stocks to Nonprofits

Federal Income Tax Brackets

For stocks held longer than a year, you are subject to long term capital gains tax which can range anywhere between 0%-20% which is determined on income. However, in all cases, it's best to hold stock for longer than a year if you expect it to appreciate, otherwise you're subject to paying a higher percentage of taxes on it if you sell too prematurely.

Most people, though, don't know that you can actually save on taxes by giving to charity. And many more people don't know that you can save more in taxes by donating stock that has appreciated in value.

Let's take two scenarios of James and Monica who each have $1000 in cash and $1000 worth of stock that they purchased for $100 dollars and have held for over a year. They each make $90,000/year putting them in the 24% marginal tax bracket. Additionally, they both itemize deductions when filing their taxes. The only difference is James is donating $1000 in cash to his favorite non-profit and Monica is donating $1000 worth of stock to her favorite non-profit.

James

$1000 cash

$1000 worth of appreciated stock purchased for $100 held for over a year

$90,000 salary in the 24% tax bracket

Itemizes deductions when filing taxes

Donating $1000 cash

Monica

$1000 cash

$1000 worth of appreciated stock purchased for $100 held for over a year

$90,000 salary in the 24% tax bracket

Itemizes deductions when filing taxes

Donating $1000 worth of stock

Who do you think will have the higher tax savings? Before looking at these scenarios, it's very important that you understand the term cost basis. Cost basis is the price at which you purchased a share of stock.


Let's see how these two scenarios play out.

Scenario 1
James donates $1000 cash to his favorite non-profit. Since James is in the 24% bracket, his tax savings by donating $1000 in cash is $240 ($1000 deduction x 24% marginal tax rate).

James then decides to sell his stock on Robinhood for $1000. James purchased this stock for $100 (his cost basis), so he gained $900 through this transaction. As a result, he ends up having to pay $135 in long term capital gains taxes ($900 capital gain x 15% long term capital gain tax rate).

As a result of James giving cash and selling his stock, he nets $105 in savings ($240 savings on cash donation - $135 tax on long term capital gains).

Scenario 2 
‍Monica donates $1000 worth of stock to her favorite non-profit. Since Monica is also in the 24% tax bracket, her tax savings by donating $1000 in stock is $240 ($1000 deduction x 24% marginal tax rate). This is the same amount that James also saved when he gave to his favorite charity.

Now, let's say Monica still wants to own the stock that she just donated to charity, so she takes the $1000 in cash that she has and repurchases the same amount of stock she donated at the current price of $1000.

‍What Monica just did here is very critical for you to understand this tax hack.

When Monica took her $1000 in cash and repurchased the stock at the current price of $1000, she reset her cost basis (price at which the stock was purchased). Previously Monica purchased the shares that she donated for $100 (her original cost basis), however since she gave those away, and repurchased the same amount of stock at $1000, she reset her cost basis.


Going forward, if Monica ever wants to sell her stock in the future, she will only have to pay capital gains tax on the difference between the future value and her new cost basis of $1000. As a result, Monica's net savings remains at $240 while James only saved $105.


As you saw through this illustration with James and Monica, donating appreciated stock is indeed the most tax advantaged way to give while also being generous to your favorite charities.


Overflow is the only platform that allows you to frictionlessly donate stock to nonprofits and take advantage of the amazing tax benefits. The gift that keeps on giving.
