Equity for Impact

How to give around an IPO

What can I give?

Depending on what kind of assets you hold, you may be able to donate cash, stock, or other assets to charity. Different assets may be more or less tax advantaged to donate depending on where you live and on your personal financial circumstances. We recommend consulting with a tax advisor to determine what’s right for you.

In general, we recommend donating your most tax advantaged assets. An example of a tax advantaged asset in the US is appreciated publicly traded stock which can be more tax efficient to donate than cash. Donating appreciated public stock can result in a bigger donation to charity as well as greater tax savings.

When should I give?

You should try to make donations in high-income tax years, like the year you realize your gain, so that you can offset your income/gain with a tax deduction from donating. One strategy to consider is donation “bunching.” When bunching donations, you donate what you might have given over two or more years in a single year and itemize your giving on your taxes in the first year. This results in a higher tax deduction from your donation in the high-income year than would giving a smaller amount in each subsequent year.

How should I give?

You can donate directly to charities you’ve chosen to support or donate via a giving vehicle like a Donor Advised Fund (DAF) or private foundation. Donating directly is a great option for people who know what charities they’d like to give to, and are ready to donate now.

A DAF is essentially a charitable savings account. It can be especially handy if you don’t yet know which charities you want to support. You can make a donation to a DAF account, claim any tax deductions possible in the tax year of a windfall and take your time to decide on the ultimate recipient(s) of your donation. Keep in mind, however, that most DAFs have minimum set-up requirements of $10k+ and charge fees on assets under management. Our partners at Founders Pledge operate a zero-fee global DAF to facilitate their members’ giving.