The Justice Love Foundation

Increase your gift to the Foundation—and your tax deduction—with a simple strategy. Contact our Team for additional assistance.

 

 

Donating Private Equity to The Justice Love Foundation

How donating a portion of your private equity interests before a liquidity event can mean a greater gift to charity

If you own private equity interests in a portfolio company nearing a liquidity event or a private equity fund that is currently winding down? Donating a portion of your interests to the Foundation could result in two significant benefits:

  1. A charitable income tax deduction for the fair market value on the date of contribution.
  2. A larger gift to the Foundation. Charities are generally exempt from capital gains tax, maximizing the value of your contribution to causes you care about.

There’s another upside to donating private equity to The Justice Love Foundation —the opportunity to recommend how the contribution is invested and potentially grow it tax-free, ultimately providing greater charitable/philanthropic support.

Fair market value of the appreciated securities as determined by a qualified appraisal, held more than one year.

This assumes all realized gains are subject to the maximum federal long-term capital gains tax rate of 20% and the Medicare surtax of 3.8%, and that the donor originally planned to sell the stock and contribute the net proceeds (less the capital gains tax and Medicare surtax) to charity.

How does it work?

Over the years you have accepted shares or distributions from or in a private equity firm. The firm may distribute portfolio company stock  as part of their structure. As such, among other assets there may be non-publicly traded stock that is preparing to be sold you can donate a portion of your interests before the sale atkes place.

A larger gift and a larger deduction

Consider this example of donating stock to The Justice Love Foundation. 

This assumes C-corp stock with no Unrelated Business Income Tax (UBIT).

This assumes all realized gains are subject to the maximum federal long-term capital gain tax rate of 20% and the Medicare surtax of 3.8%. This does not take into account state or local taxes, if any.

Fair market value of the appreciated securities as determined by a qualified appraisal, held more than one year.

 

Jump starting joint philanthropic efforts with private equity interests

If your desire is to give back and you want to find the most efficient way to make a difference to a whole community, consider talking to the Foundation,it’s the perfect way to do it.

  1. You may own distinct non-publicly traded assets that may be candidates for giving to the Foundation,
  2. Carried interest (entity formed as an LLC) as part of a compensation package.
  3. LP interest in PE Funds, giving this interest will allow the anticipated distributions to flow to the Foundation.
  4. Co-invest any LLC interest, giving this interest will also allow the anticipated distributions to flow to the Foundation.

Some Private Equity firms are structured so that it is possible for the firm to distribute portfolio company stock to the owners/directors in advance of a possible liquidity event. That stock could be converted to shares for gifting to the Foundation.

 

Donating Private Equity to our Foundation: It’s an excellent choice

  • Provide more money to charities 
  • Minimize capital gains tax exposure 
  • Take a tax deduction

Let Our Donations Team Assist with a Plan

Nearly half of high-net-worth donors do not take advantage of tax-saving methods that could help them save and give more. Let our Donations Team help you with the opportunity to position yourself by having a quick conversation on the best structure for charitable giving to the Foundation. Please take your time and submit your questions below, we will respond as quickly as possible.

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