When it comes to charitable giving, business owners have options beyond simply writing a check. Giving business interests is one of those options and, when well-planned, this type of gift can yield substantial tax benefits and philanthropic impact.

Some of the many benefits of giving business interests before a liquidity event include:

• • Leveraging a single gift to achieve a range of charitable goals
  • Maximizing your income tax deduction
  • Reducing or eliminating capital gains tax, creating even more charitable impact
  • Removing these assets from your estate, potentially reducing taxes

Foundation For The Carolinas has facilitated more than $250 million in such gifts over the past nine years. Each gift is different, based on the type of asset and goals of the donor.

Pre-IPO Stock

Years ago, capital markets executive Ross Annable invested in a local tech startup called AvidXchange. He also served on the advisory board of the company, which has grown into a leader in accounts payable and invoice management systems and is valued at more than $2 billion. Ross later contributed two gifts of private stock in AvidXchange to FFTC, with proceeds directed to his and his wife’s donor advised fund at FFTC.

Using their fund, the Annables established a scholarship at NC State University’s College of Veterinary Medicine, supported the Carolina Raptor Center’s capital campaign and provided a major gift to Kahn Academy.

Carried Interest
Walker Poole and his partners at a Charlotte-based private equity firm wanted to make a charitable impact with a gift of interests in one of their funds. While the liquidation of portfolio companies was not imminent, they wanted to explore charitable gifts of carried interest. Walker and his advisors worked with FFTC to structure a gift of partnership interests.

As portfolio companies were sold in following years, proceeds have been contributed to Walker’s FFTC Donor Advised Fund. He and his wife have used their fund to support a range of causes, such as Charlotte Country Day School, Crisis Assistance Ministry, Hopeway and KinderMourn.

LLC Interest
Commercial real estate developer Clay Grubb has given appreciated stock over the years, later gifting an ownership stake in Glen Lennox, a planned community. The gifted interests in the property are currently held by FFTC, and the income annually supports real estate programs at UNC Chapel Hill and UNC Charlotte, where Grubb served on the advisory boards.

More recently, Clay contributed interests in a long-term LLC investment that has since liquidated. A portion of the proceeds were allocated to establish a new fund in honor of his parents, supporting nonprofits in his hometown of Lexington, NC.

Private Equity
Matt Magan and his partners at private equity firm Ten Oaks Group gift a portion of every private transaction to FFTC prior to sale. Once liquidated, those gifts will support CLTRising, a tutoring and college preparatory nonprofit for high-achieving, low-income students that was founded by Matt and his wife. Their commitment is to donate at least $250,000 per transaction, with a total of at least $1 million of value from Ten Oaks holdings.

Getting Started
To explore how you can create charitable impact from your business interests, contact us at Philanthropy@fftc.org before an anticipated liquidity event. We’ll work with you and your advisors to customize a solution to meet your needs.