A Powerful Connection: Charitable Giving for Business Owners
During my involvement over many years with business owners and with charities, I have found that these two paths have often crossed. I have served on charitable boards and very often, they included business owners. The contribution these individuals have made over the years both in time, talent, and treasure has added great value to the organizations that they have served.
I will share a story of one such individual: a professional colleague of mine. This story may open a door for you if you are a business owner.
Beyond Traditional Giving
John took over an investment business from the founder after the latter was killed in an accident. As the clients all knew John, they decided to stay with the company as the basic operation of the business and the nature of client engagements was not going to change. John had been in the business for many years and was well known by the clients. He shared the founder’s values.
During the operation of the business, the founder, a generous and faithful person, made it point to contribute to charitable organizations that he was involved in. He tithed a portion of his business income. When he died a portion of his estate also went to charity. When John took over, he put in a different charitable giving strategy, which could be more effective, especially if he sells the business.
Unlocking Impact: Making Charity a Shareholder in Your Business
John decided to make charity a shareholder in the business. He gifted a portion of his stock in the business to charity. He received a current tax deduction for the gift based on its value. This lowered his current tax bill and allowed him to give even more to charity.
An additional benefit would come when John sold the business. In that case the charity would realize cash from the sale of their interest in the business. The impact here would be substantial.
Integrating Philanthropy into Business Succession & Planning
This strategy can work well when a charitably inclined business owner wants to consider more effective gifting. There are additional strategies that can be part of transferring the business interest to family, other shareholders, or key employees while considering charity.
If you are interested in exploring these possibilities to make a contribution to your church or a ministry in the Diocese of Atlanta, please contact us!
Pat Renn
Pat Renn (he/him) is the founder and president of The Renn Wealth Management Group and has more than 35 years of experience in the financial services industry. He is a member at the Cathedral of St. Philip where he has previously served as junior warden and endowment chair; he has also served as board member and endowment chair of Holy Innocents' Episcopal School.Learn more about the ECF Board of Directors.