In this personal essay, Stand Together partner David DeWolf shares how a casual lunch conversation with the Stand Together Planned Giving Team turned into a tax-advantaged strategy for the sale of his company, 3Pillar Global. Working with Stand Together in advance of the sale, David was able to establish a charitable giving vehicle while achieving significant tax benefits. He then used those tax savings to make a $100,000 donation to the #GiveTogetherNow campaign, a rapid-response effort to help families impacted by COVID-19. As David puts it, it was “a win-win” for all involved.
I’m a relatively new member of the Stand Together philanthropic community: I was one of those slightly dazed first-timers you might have seen taking copious notes in Palm Springs last January. My wife Teresa and I then enthusiastically attended the Colorado Springs summit six months later. The breakthrough thinking and rewarding relationships I gained at those gatherings have already paid off—bigtime. After enjoying three days of sunshine and spicy Southwestern food and hearing how seasoned philanthropists are impacting our society, I left Palm Springs early in 2019 with the beginnings of a planned-giving strategy that is working out so well, both financially and philanthropically, that I wanted to share it.
Over cocktail conversations and informal presentations, the caliber of the people I met at those early summits blew me away, as did the realization that my philanthropic priorities overlapped significantly with those of Stand Together. It didn’t take me long to decide I wanted to contribute and become a partner.
As the founder of 3Pillar Global, a digital software business and one of the decade’s fastest-growing U.S. companies, I’m a passionate entrepreneur who believes that every human being has something uniquely valuable to contribute. Of course, any good leader would say the same. But in addition to being a husband and a CEO, I’m a father—our eighth is due in August as a matter of fact. And I want my children (four girls, three boys, and counting) and all Americans to live in a country full of promise and opportunity, where the American dream is accessible to everyone. I became convinced that Stand Together’s collaborative, bottom-up approach, working with extraordinary social entrepreneurs on programs that will ensure this country lives up to the principles of the Declaration of Independence, is the only way to achieve this goal.
So, what was the win-win strategy I learned about last winter in Palm Springs? It all started with tacos. Over a casual lunch conversation, I talked with members of Stand Together’s gift planning team about the pending recapitalization of my business and partnering with Stand Together in a tax-advantaged and mutually beneficial way. The team highlighted a couple of charitable gifting strategies that might be worth considering from a tax-planning perspective and planted the seeds for the solution that ultimately made the most sense for me and my family. I decided to donate a portion of my private company shares to establish a donor-advised fund with Stand Together before the sale of the business.
By making this charitable contribution before entering into any formal agreement to sell the company, I was able to achieve significant tax advantages and accomplish the following things:
- An immediate income tax deduction at the time of the donation equal to the appraised value of the shares donated to the donor-advised fund;
- Avoidance of capital gains tax on the appreciated value of the donated portion of the business;
- Removal of assets from my taxable estate;
- Establishment of a charitable giving account that allows me to invest and grow the proceeds from the sale of the business tax-free.
Best of all, my Stand Together donor-advised fund allows me to make distributions on my own timeline to support Stand Together organizations and initiatives or any other qualified 501(c)(3) organizations outside of the Stand Together community.
I was so pleased with my experience at Stand Together and working with their gift planning team that I introduced my business partner who had a minority interest in 3Pillar Global so he would also benefit from this charitable gifting strategy. I am hoping he becomes a new Stand Together donor partner and joins us at our next Summit. After all, as a member of this entrepreneurial community you never know where the next lunch meeting might lead!
If you would be interested in more information on the strategy described above or having a conversation with the Stand Together gift planning team on other gift planning strategies, please contact Mark McConnell, CFP® at email@example.com or 571-290-7338.
Stand Together does not provide legal or tax advice. Please consult with your own attorney or tax advisor regarding your estate plans.
Photo credit: Matt Couch
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