Receiving Donated Securities: A Charity-Side Checklist

A donor's advisor calls in late November to say their client would like to transfer shares to your charity before year end, and asks for your account details. If your charity does not have a brokerage account, cannot say who is authorised to give instructions, and has no policy on whether it sells or holds, the gift is at risk. This is an operational sequence with a deadline attached, and most of the work should be done before any donor calls. This guide covers the sequence from account setup to receipt.

What do you need in place before the first gift arrives?

A brokerage account, signing authority, a gift acceptance policy and a transfer instruction sheet. All four take longer to arrange than the donor's timeline usually allows.

The brokerage account has to be in the charity's legal name, and opening one takes documentation: your governing documents, your registration number, director identification and a board resolution authorising the account. Institutions differ in what they ask for, so start early rather than in November. The same considerations that apply to a charity's banking arrangements apply here.

Signing authority needs to be settled in the same resolution: who can give instructions to the broker, who can authorise a sale, and who cannot do both alone.

The gift acceptance policy says what your charity will accept. Listed securities are usually straightforward; shares in a private company are not, and a policy that says so saves a difficult conversation.

The transfer instruction sheet is a one-page document giving your account number, the broker's name and contact, your registration number and a request that the donor's advisor notify you when the transfer is initiated. Have it ready to send the same day.

How does the transfer actually happen?

The donor instructs their own broker to transfer the securities to your charity's account, and the two institutions settle it between them. Your charity's role is to accept and confirm.

The usual sequence runs like this. The donor tells your charity they intend to make a gift of shares. Your charity agrees to accept and provides its account details. The donor's advisor initiates the transfer, generally through a letter of direction. The shares arrive in your account, and your broker confirms receipt.

Two things go wrong most often. The donor sells the shares and gives you the cash instead, which changes the transaction entirely and is a decision for the donor with their own advisor. Or the transfer is initiated so close to year end that it does not settle in time.

Confirm receipt in writing when the shares arrive, and note the settlement details. That confirmation is the evidence behind the date on the receipt.

Never issue a receipt on the strength of a stated intention. The gift is made when the transfer happens, not when it is promised.

What is the date of the gift?

The date the transfer of ownership takes place. For an ordinary electronic transfer CRA's general rule is the date the shares were received in your charity's account or its broker's account.

CRA reads ownership as the charity having taken on the attributes of a shareholder: the right to receive dividends, the right to receive amounts on the liquidation of the corporation, and the right to exercise the votes attached to the share.

The general rule for electronic transfers applies where three things are true: the donor has told the charity it intends to make a gift of shares, the charity has agreed to accept by giving the donor its account number, and the transfer of the shares and all rights attached to them has taken place.

CRA also says the charity should review each situation to confirm the date, and get legal advice where it cannot. That instruction matters at year end, when a day either side changes the tax year for the donor. 

Record the date the shares arrived, the confirmation from your broker, and anything unusual about the transfer. That is what supports the date on the receipt if it is ever questioned.

How do you value the shares?

For shares listed on a designated stock exchange, CRA accepts the closing bid price on the date the shares are received. There is an alternative where it produces a better answer.

CRA can also accept the midpoint between the day's high and low trading prices where that is a better indicator of fair market value on normal and active market trading. Either way, the charity has to review each situation and arrive at a value it can justify.

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Print or save the price source on the day. Reconstructing a closing price from memory eleven months later is possible but not persuasive.

Shares not listed on a designated stock exchange are a different matter. The deemed fair market value rules may apply to them, and valuing a private company share is a specialist exercise rather than a bookkeeping one. Get professional advice, and note that non-qualifying securities carry further rules of their own.

Do you sell or hold?

A policy decision the board should have made before the gift arrives, not a judgment made in the week it does. Either answer is defensible; not having one is not.

Charities that sell on receipt convert the gift to cash quickly and avoid market exposure on an asset they did not choose. Charities that hold need an investment policy, a reason for holding, and someone accountable for monitoring it.

Whichever you choose, the receipt is unaffected. The gift was made when ownership transferred, and the value on the receipt is the value at that date. A later sale at a different price does not change it.

Movement between receipt and sale is an investment gain or loss in your books, not additional donation revenue. Brokerage fees on the sale are an expense of the charity.

Write the policy down and put a timeframe in it. "Sell within five business days of settlement unless the board resolves otherwise" is a policy; "we usually sell" is a habit.

What does the receipt show and how do you record it?

A non-cash receipt with a description of the securities and the value at the date of the gift, and normally no appraisal for actively traded shares listed on a designated stock exchange. The securities themselves are the description.

The receipt carries the standard elements, including the eligible amount of the gift, plus the ones required for a gift of property: the date the gift was received, a brief description of the property, and the fair market value of the property at the time the gift was made. Where an appraisal was done the appraiser's name and address are required, and for listed securities there is normally no appraisal, so that element does not apply.

Describe the security specifically: the number of shares or units, the issuer and the class. Our page of receipt examples shows the format for non-cash gifts.

In the ledger, record the securities as an asset at fair value on the date received. The revenue side follows your contribution recognition policy and any restriction the donor attached, so a gift restricted to a purpose is not automatically unrestricted revenue on arrival. On sale, the difference between proceeds and the recorded value is an investment gain or loss.

The annual return separates the two types. On Schedule 5, privately held securities are box 540 and publicly traded securities, commodities and mutual funds are box 550, and line 580 is the total eligible amount of receipted non-cash gifts. That total forms part of line 4500, your total eligible amount of receipted gifts. Keep the two categories apart in your charity bookkeeping from the start, and reconcile the non-cash total to line 580 before the return is drafted. 

Donors are usually advised to give appreciated securities directly rather than selling first, for reasons that belong to their own tax position. That is a conversation for the donor and their advisor, not for the charity, and a charity should be careful not to give it. Setting up the account, the policy and the receipting process is the charity's side, and it is what ongoing bookkeeping support should have in place before the season starts.

Frequently Asked Questions

The donor sold the shares and sent us the proceeds. Is that the same gift?

No. That is a cash gift of the proceeds, and it is receipted as cash for the amount received. The difference matters to the donor's own tax position, which is why donors are usually told to transfer the shares rather than sell them first.

What date goes on the receipt if the transfer settles on 2 January?

The date the transfer of ownership took place, which for an ordinary electronic transfer is generally the date the shares were received in your charity's or its broker's account. A gift settling on 2 January is a gift in the new year, however the donor intended it.

Which price do we use?

For shares listed on a designated stock exchange, CRA accepts the closing bid price on the date the shares are received, and can also accept the midpoint between the day's high and low where that better reflects fair market value on normal and active trading. Save the source.

Do we need an appraisal for donated shares?

Normally not for actively traded shares listed on a designated stock exchange, where the market price gives the value. Where an appraisal is obtained for any gift of property, the appraiser's name and address are required receipt content. Shares not so listed are a different question, and both valuation and the deemed fair market value rules need professional advice.

Does the deemed fair market value rule apply to donated shares?

Certain publicly traded securities are among the categories excepted from that rule. Shares that are not listed on a designated stock exchange can be caught by it, which is one of several reasons private company shares need advice before acceptance.

What if we sell for less than the receipted value?

The receipt stands. It reflects the value at the date the gift was made. The shortfall on sale is an investment loss in your books rather than a correction to the receipt.

This article covers the charity's operational sequence for receiving donated securities as at September 2026. It excludes general gift-in-kind valuation, donor tax planning, and privately held or non-qualifying securities, which need professional advice. Confirm the current valuation and date-of-gift guidance against CRA before issuing a receipt for a significant gift of securities.