Equity Compensation & Charitable Giving with Donor Advised Funds

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Executive equity compensation awards, such as stock options, restricted stock units, and directly held shares of company stock with large embedded taxable positions can be the most tax-advantageous assets to use to meet philanthropic goals. The structure of these holdings can add complexity to the giving process, both for the donor and the recipient. Fidelity Charitable put together this useful piece on how to use Donor Advised Funds (“DAF”) to facility this powerful financial planning strategy.

I’ve also put together quite a bit of information about charitable giving using executive compensation in an effort to help investors maximize their charitable donations:

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Imagine a Smarter Way to Give to Charity Using Appreciated Company Stock

When you give, you want your charitable contributions to do the most they can—for your charities and for you. A Giving Account®, the donor-advised fund at Fidelity Charitable®, provides a simplified approach to supporting charities while maximizing your charitable contributions and tax benefits—an approach that can transform the way you give.

By establishing a Giving Account®, you can take advantage of a solution that:

  • Enables you to support multiple charities, at virtually any time, with a single contribution

  • Allows you to take an immediate tax deduction for your contributions—separating the timing of your tax deduction from your charitable support

  • Makes it possible for you to contribute stocks, mutual funds, or non-publicly traded assets, such as restricted stock, stock resulting from exercise/vesting of options or RSU that has reached its long term holding period,1 which other charities may not be able to accept

  • Provides an array of investment options, including a program that enables donors to recommend qualified investment advisors to manage charitable assets held in a Giving Account at Fidelity Charitable

  • Streamlines your record keeping and consolidates tax receipts, all in one online location

  • Can be a valuable estate planning tool to support your legacy goals

How a Donor-advised Fund Works

The chart below provides a snapshot of the charitable opportunities for equity compensation awards:

Are you interested in setting up a donor-advised fund and want someone to help you? Feel free to contact me with any questions about donor-advised funds or how my team can help set up a donor-advised fund for your charitable giving.

Source: Fidelity Charitable