Charitable Giving Strategies for Business Owners
Your Business. Your Legacy.
Pay it forward. The phrase is often used by people with philanthropic goals. Successful entrepreneurs who own interests in closely held corporations, S-corporations, or shares in a professional corporation have a unique opportunity to “pay it forward” they may not have thought about.
As you engage in business succession planning, you can meet your philanthropic goals with a charitable gift of an interest in your business. This strategy can facilitate the transfer of a family-owned business with lower tax exposure, contribute to your retirement income, and create a permanent charitable legacy.
How it works
Privately held business interests can be given as an outright gift. You may be able to make a gift of privately held stock or business interests as long as the constituting documentation for the business permits additional owners. (The IRS, however, says there can be no prearranged contract or agreement for us to sell the stock or for the corporation to buy it.) You will need to value the interest in the business entity with a qualified appraisal.
A gift of your privately held stock or business interests takes careful planning. Make sure to consult your professional legal and tax advisors to see how to maximize the benefits of this tax-efficient strategy for making a difference.
This gift is right for you if:
- You would like to avoid capital gains taxes on the shares or interests you give to University of Rhode Island Foundation & Alumni Engagement.
- You would like to receive a federal income tax deduction for the full appraised value of the gift.
- You would like to make an impact.
Your Next Steps
Gifts of business interests can be complex. At URI, we are committed to ensuring the proposed gifts are in the best interest of both you and University of Rhode Island Foundation & Alumni Engagement. We encourage you to work with your legal and financial advisors when considering a gift of business interest.
Click on the links below to see the additional ways to fund your gift:
- A gift in your will or living trust.
- A charitable gift annuity.
- A charitable remainder trust.
- A charitable lead trust.
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Gifts That Pay
Your payments depend on your age at the time of the contribution. If you are younger than 60, we recommend that you learn more about your options and download this guide Plan for Retirement With a Deferred Gift Annuity.
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Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. California residents: Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. Oklahoma residents: A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. South Dakota residents: Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.