Fundraising through alternative assets can be a powerful strategy for organizations looking to diversify their revenue streams.

Our biggest piece of advice?

Get organized early, understand your assets, and communicate clearly with donors.

Alternative assets can include real estate, stocks, bonds, cryptocurrencies, art, collectibles, and more. Each type of asset requires a different approach for acceptance, valuation, and liquidation. Before you begin soliciting these types of donations, it's crucial to have a clear understanding of what you're willing to accept and how you'll manage these assets.

To start, focus on one or two types of assets that align closely with your organization's mission and the interests of your supporters.

This approach allows your organization to build expertise and streamline processes before expanding to other asset types.

Start by drafting a comprehensive policy that outlines the types of assets your organization will accept, the process for evaluating these assets, and the procedure for liquidating them. This policy should also address any restrictions on the sale of donated assets and how the proceeds will be used.

To develop a comprehensive policy around accepting and managing alternative assets, it's crucial to educate yourself through reputable sources. Organizations like Schwab Charitable offer detailed guides on various non-cash asset donations that donors could give.

Additionally, resources from Stanford Social Innovation Review (SSIR) and industry publications such as Nonprofit Quarterly can provide valuable insights and case studies.

Engaging with professional associations like the Association of Fundraising Professionals (AFP) or the Council on Foundations can also be beneficial, as they often offer training sessions, webinars, and policy templates.

Ensure your team, including board members, development staff, and volunteers, are well-educated about alternative assets. They should understand the benefits and potential challenges, such as fluctuating market values and the need for expert appraisals.

Regular training sessions and access to resources will empower your team to handle these donations confidently.

When approaching potential donors about alternative assets, clear communication is key. Provide them with easy-to-understand information about your organization's policies and the potential tax benefits of their donation.

Be transparent about how the assets will be used and the impact their donation will have on your mission.

Accurately valuing alternative assets is essential for both the donor and your organization.

Establish relationships with qualified appraisers and financial advisors who can provide reliable valuations. This ensures that both parties receive fair value and can take full advantage of any tax benefits.

Have a plan in place for how you will liquidate alternative assets. This might involve selling stocks, auctioning art, or converting cryptocurrency to cash.

The goal is to turn these assets into usable funds for your organization as efficiently as possible. Make sure to follow any legal or regulatory requirements in the process.

Specialized Platforms like Cocatalyst can streamline the liquidation process for non-cash assets, including stocks and cryptocurrency. These services facilitate the conversion of donated assets into cash quickly, which can then be added to the nonprofit's balance sheet.

Maintaining meticulous records of all transactions is crucial for compliance and reporting.

Track the acquisition, valuation, and sale of each asset. This not only ensures transparency but also helps in preparing accurate financial statements and donor reports.

Leveraging technology can simplify the management of alternative assets.

Consider using your software to track donations, automate communications with donors, and generate necessary reports. This can save time and reduce the risk of errors.

The market for alternative assets can change rapidly, and so can the regulations governing their acceptance and liquidation.

Regularly review and update your policies to ensure they remain relevant and compliant. Stay informed about trends and legal changes that could impact your fundraising strategy through reputable sources, such as:

Donors' knowledge will vary significantly. Providing clear, accessible information about the donation process and benefits is crucial.

Create educational materials that explain the steps involved in donating alternative assets, including any necessary appraisals, tax implications, and the impact of their donation on your mission. Ensure your team is well-trained to answer questions and guide donors through the process.

Be aware of potential pitfalls such as compliance with IRS regulations, the need for proper valuation of assets, and managing the timing of asset liquidation to avoid adverse financial consequences. Partnering with financial advisors and legal experts can help navigate these complexities and ensure both your organization and the donors are protected.

​​Building relationships with professional advisors, such as tax professionals, estate planners, and financial advisors, can provide valuable insights and support. They can help navigate complex transactions and offer advice on maximizing the benefits of alternative asset donations.

Sharing success stories of past alternative asset donations can inspire other donors and demonstrate the impact of such contributions. Highlight how these donations have supported your mission and the benefits donors received in return.

Fundraising with alternative assets requires careful planning and execution, but the rewards can be substantial.

By understanding the types of assets, developing clear policies, and communicating effectively with donors, your organization can successfully diversify its revenue streams and enhance its financial stability.