Q&A With Steve Latham, Founder and Chairman of DonateStock

Steve Latham is the co-founder and chairman of DonateStock, which seeks to transform charitable giving by making it fast, safe and free for everyone to donate stock to nonprofits. Latham is a Harvard MBA and a serial entrepreneur with multiple exits in the analytics, marketing and software industries. He is now applying his experience to unlock new sources of funding for nonprofits of all sizes.

DonateStock: To begin, what problems are you aiming to solve at DonateStock?

Steve: The pandemic’s impact on nonprofit fundraising was prolific. As many nonprofits rely on event-based fundraisers, they must now find new ways to raise money. Stock gifting represents $100 billion in unrealized funding each year. Appreciated stock offers the highest tax savings to donors as one can legally avoid capital gains tax while deducting 100% of the value of the contribution. Pre-tax stock donations save donors a boatload on taxes while allowing nonprofits to keep the proceeds that would otherwise go to the IRS. It truly is a win-win for everyone.

Unfortunately, less than 2% of the 60 million investors donate stock to nonprofits due to structural issues:

• First, very few investors are aware of the benefits of donating stock. Ask your friends and let me know if anyone is aware that they can avoid capital gains tax by donating stock.
• Second, the archaic process of donating stock has not changed in 20 years. Donors must jump through all kinds of hoops to gather information, fill out forms and deliver (usually in person or by mail or fax) requests to transfer stock to a nonprofit.
• Third, only a fraction of nonprofits have brokerage accounts that are necessary to receive stock. Among those that do, very few are adept at soliciting and processing more than a handful of donations each year.

DonateStock: How do you think your technology can address this?

Steve: DonateStock is leveraging technology and common sense to solve the following problems:

• We’ve streamlined the process of donating stock. In 10 minutes or less, one can initiate a tax-advantaged stock donation to a selected nonprofit at donatestock.com.
• We educate donors (directly and through our partners) on the benefits and ease of stock gifting.
• We convert stock gifts to cash payments for nonprofits that do not have brokerage accounts.
• We help all nonprofits accelerate stock gifting with educational content, marketing playbooks, real-time notifications and dashboard reporting to simplify and streamline the entire process.

DonateStock does this all for a fee that is less than what most nonprofits pay to process cash and credit card donations.

DonateStock: Can you tell us the backstory about what inspired you to originally feel passionate about this cause?

Steve: Approximately 10 years ago, I tried to donate stock to a scholarship fund. It took four to five hours over several days to do the research, gather the nonprofit’s DTC and brokerage information my broker required, fill out forms, fax the forms, verify my signature and keep all parties informed. It was such a hassle that I never did it again. Last year, I thought about that process and assumed someone had solved the problem with a user-friendly process for donating stock. When I discovered no one had, the idea for DonateStock was born.

DonateStock: How do you think this might change the world?

Steve: DonateStock’s goal is to transform charitable giving by making stock gifting mainstream. If every investor donated $2,500 in appreciated stock, $150 billion would flow to nonprofits each year. Individual giving (mostly cash, checks and credit cards) totaled $300 billion last year. So the opportunity to help nonprofits is very significant.

DonateStock: Do you see any potential drawbacks about this technology that people should think more deeply about?

Steve: Some would point out the “risk” that the government might change its policy of allowing donors to avoid capital gains tax on stock donations. But I think it’s unlikely as the government can find other ways to tax the wealthy without adversely affecting nonprofits. If one day there is so much stock gifting that the tax code has to be changed, we’d feel pretty good about what we accomplished.

DonateStock: If you could tell other young people one thing about why they should consider making a positive impact on our environment or society, like you, what would you tell them?

Steve: Our purpose is not grounded in fame, fortune or commercial success, but in our personal growth and contributions to the greater good — however we define it. We all have unique gifts and abilities. Discover what you are great at and explore how you can leverage that to maximize your impact. Whether it’s coaching soccer, organizing fun runs or starting a stock gifting venture, do what you do best to help those who will benefit the most.