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  • 1.  Securities Gifts from Unknown Donors

    Posted 5 days ago

    Happy Monday,

    We occasionally receive gifts of securities without any donor information attached. In most cases, we can get back in touch with the donor's broker and get the necessary information. However, there are still occasions when the broker refuses to give us the personal information, even if there is no requirement for donor anonymity; I guess they feel that's not their information to share.

    In the past, we have just booked those gifts to an anonymous account in the CRM and moved on. However, our General Counsel has advised us that we can no longer accept these gifts without knowing who the actual donor is, regardless of the size of the gift. The problem is further exacerbated by the fact that our own brokerage is under instruction from our investment management folks to liquidate any securities under $XX. Thus we can't just send the shares back since they have been converted into cash by the time the info gets to us. 

    Has anyone encountered a similar problem and how have you dealt with it? We are unlikely to get any changes at the level of our own broker not liquidating the shares given the overall volume they handle and the lack of details. I don't want to place any sort of process at the front end that might impede our donors from getting their gifts in, plus we aren't staffed to handle some sort of "approval" process for receiving securities gifts. Thus my conundrum. Thank you!

    -jsg



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    Josh Greenbaum
    Emory University
    jgree2@emory.edu
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  • 2.  RE: Securities Gifts from Unknown Donors

    Posted 5 days ago
    I've written numerous institutional policies addressing this issue, Josh. Counsel at Duke made the same observation to me in the early 1990s. So, I have been advocating different, streamlined protocols that generally avoid these issues.

    Selling securities without knowing their owner is the primary issue to address. That should never occur. With alternate procedures, you should always know in advance which donors are sending which gifts. And, if you cannot link a stock to a donor, then the security should be DKed.

    A major reason for many unknown stock donations is that DTC instructions are published somewhere, and donors are randomly sending stock based on those without sufficient communication. It's probably time to close that DTC account, open a new one, and require your donors or their brokers to contact you for the latest "one-time" instructions in exchange for the information you need to identify the gift.

    Although it isn't as detailed as the protocols I write for clients, the following aasp Best Practice I prepared five years ago might offer a few tips on how to reduce the current problem:


    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987