Helped Clients Recover Over $25 Billion. Since 1979.
Helped Clients Recover Over $25 Billion. Since 1979.
Founders and early employees often hold most of their wealth in stock of a company that hasn’t gone public or been sold. That stock can usually be given to charity, but the company’s transfer rules, the timing of any sale, and the appraisal all need attention. The Schenk Law Firm handles the legal side of the gift.
Reviewing Transfer Restrictions
We review the company’s bylaws, stockholder agreements, and equity plan for transfer limits, rights of first refusal, and lockups that affect a gift.
Company Approvals
Most private companies must approve a stock transfer. We prepare the request and the approval documents and work with the company’s counsel.
Transfer and Gift Documents
We prepare the stock assignment and any gift agreement with the charity, donor-advised fund, or foundation receiving the shares.
Working With the Appraiser
A gift of private stock generally needs a qualified appraisal. We don’t perform appraisals. We work with your appraiser or help you find one, and we provide the company documents they need.
Working With the Receiving Charity
Charities and fund sponsors have their own review for private stock. We answer their questions and gather what they ask for.
Coordinating Your Advisors
The deduction and its limits depend on the stock, how long you’ve held it, and who receives it. We work with your tax attorney and CPA on those questions, or we find them for you.
When should I make the gift?
Make the gift before a sale of the company is close to final. Once a sale is nearly certain, a gift may be taxed as if you sold the shares first, so plan the timing with your tax counsel early.
Will my company allow the transfer?
Many companies allow gifts to charity, sometimes with conditions. The company’s documents set the rules, and some require board approval or give the company a right to buy the shares first.
Should I give to a donor-advised fund or a foundation?
The answer affects your deduction. Gifts of private stock to a private foundation generally get a smaller deduction than gifts to a public charity or a donor-advised fund. Our comparison page covers the differences.
Can I give stock options?
Unexercised options usually can’t be transferred, and some that can are taxed differently. Shares you already own are usually the asset to give.
Do I need an appraisal?
Generally, yes. A gift of private stock above a modest value needs a qualified appraisal to support the deduction. We work with the appraiser you choose or help you find one.
Experience
David Lizerbram has practiced business law for more than two decades. Benjamin Schenk founded and runs a commercial real estate investment and asset management firm.
Startup Equity Experience
We document founder stock, equity grants, and investment rounds for startups, so we know where transfer limits sit in a company’s documents. Our startup equity page has more.
One Coordinator for Your Advisors
We act as the coordinator for your plan. We work with your tax attorney, estate attorney, and CPA, or we find the right ones for you and coordinate their work with ours.
The Schenk Law Firm is based in North Park, San Diego. We advise founders and employees throughout California on gifts of company stock.
Our full philanthropy and nonprofit practice.
Private Foundation vs. Donor-Advised Fund
How the two main giving vehicles compare.
Forming the foundation, its bylaws, and its board.
A flexible company for grants, investments, and advocacy.
Founder equity, equity incentives, and investment rounds.
Buying, selling, or merging a business.
The window for giving private stock usually closes once a sale or IPO is certain. We can review your company’s documents and prepare the transfer while there’s time.
Contact us today to discuss a gift of company stock.
Request a ConsultationGiving shares that have grown in value can let you avoid capital gains tax on that growth while supporting a charity. Your tax counsel can confirm how it applies to your shares.
It’s a company’s right to buy shares before they go to someone else. Many startups have one, and the gift has to work around it.
A lockup usually limits sales and transfers for a period after the IPO. Some allow gifts if the recipient agrees to the same limits.
It depends on the company’s approval process and the receiving charity’s review. Starting well before any planned sale leaves room for both.