Donating Securities

See also UPP 1-13: Gift Acceptance and Processing

Donations of securities can come to Marquette in two forms, either certificate form or by electronic transfer from a donor’s securities account to Marquette’s securities account. Securities held at a brokerage firm are held in "street name". We advise donors that it is not in their best interest to have securities in certificate form re-registered into Marquette’s name. We give that advice because of the time it takes to have the transfer agent issue a certificate in Marquette’s name. The reasons are explained below.

Security donations in certificate form registered in the donor’s name can be transferred to the University by donor endorsement on the back of the certificate or with a completed stock/bond power.  The endorsement should be exactly as the name appeared on the front of the certificate.  Brokerage firms and transfer agents will not process the transfer if there is a disparity with the name.  The signature must be guaranteed by a financial institution.  In most cases the certificate must be accompanied by a donor gift letter stating the intention of gift.

It is not recommended for a donor to mail both the certificate and stock/bond power together.  Each should be mail separately.  Together, the certificate and stock/bond power are negotiable, separately they are not. 

URS Code regulation 1.17A-1(c) cites that the deductible amount of a charitable contribution is the property’s fair market value at the time of the donation.  The time of the donation can be established by the date entered on the certificate or the stock/bond power, the date of the donor letters, or the postage date on the envelope if no other date is entered.  The University uses the mean (average) of the high and low on the date of donation for valuation.

Almost all of the securities the University receives are traded on some securities exchange and can be easily donated.  However, securities of privately held company’s are not traded and must be cleared through Treasury Services before acceptance.  

Some donors may think it is easier to have a certificate re-registered in the University’s name.  However, the University has discouraged this because the date on the certificate in the University’s name establishes the donation date for valuation.  The time frame for the re-registration can take three to six weeks.  The longer time frame exposes donor to the risk of the donation not falling within the current calendar year.  It can also affect the security price- a risk of reducing the amount that the donor can take as charitable deduction.  This method of transfer is often used when the donor only has one certificate and wants to make a partial gift to the University.  The University can accommodate this type of transfer without the donor getting the certificate re-registered in the University’s name.

Donation of securities by electronic transfer (DTC)

Electronic transfer of securities is easy and quick.  Often as short as one day.  It is in the donor’s interest for us to use electronic transfer of securities wherever, whenever possible. 

Electronic transfer of securities can be done in two methods.  First, the University uses the same brokerages firm that the donor uses.  Second, the University does not have an account with the same brokerage firm that the donor uses.

In the first case, donors can instruct their account representative to make an internal transfer of the number of shares that they want to donate into the University’s account.  A list of brokerage firms and the University’s account numbers is available in the Treasury Office.  The date that the security is “journal led” into the University’s account is the date of the donation.  However, the University will accept brokerages date of donation in all cases and check the valuation used.  

In the second case, donors can instruct their account representative to deliver the number of shares that they want to donate via Depository Trust Company (DTC) to the University preference brokerage accounts.  A list of preference accounts is available in the Treasury Office.  Our representatives from the University’s preference accounts have a good track record of notifying us of new gifts and identification of donors.  If a donor broker is hesitant to send a security DTC, it usually means the broker would like to get the commission on selling the security being donated.  Refer the broker to Treasury Services. 

In all cases a broker should be getting sell instructions only from Treasury Services.  The University will set up new accounts with brokerage firms in order to affect the donation of securities if that is the only way the donor want to effect the donation or if that is the only way that the donation can take effect.  A good example of this is a security in form of a mutual fund.  Since the mutual fund companies that offer this type of securities does not have selling agreement with many brokerage firms sometimes the mutual fund cannot be electronically transferred.  Thus, opening a new account directly with the company is the only way to effect the donation.

In both cases, after the security has been transferred to the University, the gift date verified, and the valuation completed, Treasury Services will produce a “security locator” that details the information about the donation.  The located is e-mailed to Gift Records and Acknowledgement in University Advancement and Comptroller.