What Types of Business Interests Can Be Donated?
Potential gifts may include:
- Ownership interests in privately held businesses
- LLC membership interests
- Limited partnership interests
- Shares of closely held C corporations
- Shares of S corporations*
- Interests in family-owned businesses
Because these gifts can be complex, early planning is important. Donors often achieve the greatest benefit when charitable giving conversations begin before a business sale, transition or succession plan is finalized and while various options are still being considered.
*Certain restrictions and additional review may apply to gifts of S corporation interests.
Why Donors Consider Business Interest Gifts
These gifts may allow you to:
- Make a larger charitable impact without affecting cash flow
- Potentially reduce capital gains taxes
- Support transformational pediatric care and research
- Create a lasting philanthropic legacy
Timing Matters
Gifts of business interests generally must be completed before a sale transaction becomes legally binding. Once a sale is effectively certain or contractually committed, potential tax benefits may be limited.
If you are considering the future sale, transition or succession of a business, we encourage you to begin charitable planning discussions as early as possible and before any binding agreement is finalized.
Our team works closely with donors and their legal, tax and financial advisors to explore opportunities and help ensure gifts are structured appropriately.
A Donor Story: Turning Business Success into Lasting Impact
Mark built his engineering firm over more than 20 years and is beginning to plan for a future sale of the company. Like many business owners, much of his wealth is tied up in the business itself rather than in liquid assets.
Working with his financial advisor, Mark could choose to donate a portion of his ownership interest before a sale. For example, he could contribute a 10% ownership stake to Children’s Hospital Colorado Foundation prior to the transaction.
When the business is sold, the Foundation’s ownership stake could translate into a significant investment in pediatric care and research, while potentially helping Mark reduce capital gains taxes on the donated portion of the business.
This example is for illustrative purposes only. Every donor’s situation is unique, and potential tax or financial benefits will vary.