Give private shares. Deduct what they're worth.
A donor-advised fund built for founders, early employees, and investors. Donate private stock ahead of a liquidity event to avoid capital gains tax, get a bigger deduction, and seed a long-term giving vehicle.
Why private stock belongs in a donor-advised fund
The tax code treats gifts of private stock very differently depending on who receives them.
Deduct the fair market value, not cost basis
IRC §170(e)(1)(B)Gifts of appreciated private stock to a private foundation are deductible only at cost basis. For a founder with near-zero basis, that is close to nothing. The same gift to a public charity like APF is deductible at its appraised fair market value.
Avoid capital gains tax
Tax-exempt sale inside the fundGiving appreciated stock before liquidity can avoid capital gains tax that would reduce a cash gift after a sale. APF can later sell qualifying shares tax-free inside your fund.
Higher deduction limits
30% of AGI for stock, 60% for cashGifts of appreciated stock to a DAF are deductible up to 30% of adjusted gross income, versus 20% for a private foundation. Anything unused carries forward for five years, which matters in a liquidity-event year.
Privacy
No public 990-PF of your ownA private foundation publishes its assets, officers and every grant. Through APF you can grant to charities anonymously, keeping you off solicitation lists and out of public filings.
Estimate the difference
Enter your shares' appraised value and cost basis, then adjust the tax rates. Compare estimated deduction savings and avoided capital gains tax through APF and a private foundation.
| Through APF | Private foundation | |
|---|---|---|
| Charitable deduction | ||
| Federal income tax saved by the deduction | ||
| Federal capital gains tax avoided | ||
| State capital gains tax avoided | ||
| Total estimated tax benefit |
Simplified estimate of federal deduction savings plus federal and state capital gains tax avoided. Assumes appreciated C corporation shares held over one year, a gift completed before a binding sale, full use of the deduction within the carryforward period, and the entered marginal rates applying to the entire gain. Both gift types avoid donor-level capital gains tax in this illustration; APF's additional benefit comes from the larger deduction. Excludes state charitable deduction savings, the 0.5% AGI floor, AMT, federal-state tax interactions and private-foundation excise taxes. Confirm with your tax advisor.
APF versus a private foundation
Private foundations offer control and a family name on the door. For a gift of private stock, they cost you most of the deduction and add years of compliance.
| Donor-advised fund at APF | Private foundation | |
|---|---|---|
| Deduction for private stock | Fair market value | Cost basis only |
| Deduction for public stock | Fair market value | Fair market value, capped at 10% of a company's shares across you and your family |
| AGI limit for appreciated stock | 30% | 20% |
| AGI limit for cash | 60% | 30% |
| Tax on investment income | None | 1.39% excise tax on net investment income |
| Annual payout requirement | None | 5% of assets every year |
| Holding period for gifted stock | Held through liquidity when our investment policy supports it | Your choice, but subject to the 5% payout, which can force sales of other assets |
| Large stakes in one company | Excess business holdings rules apply: generally 20% of voting stock, combined with you and your family, with five years to reduce gifted excess | The same 20% limit and five-year window |
| Public disclosure | Grants can be anonymous | Public Form 990-PF lists assets, officers and every grant |
| Setup and administration | Open a fund. APF handles legal, tax filings and audit. | Incorporate, seek IRS approval, staff a board, file annually and manage self-dealing rules |
| Investment approach | Endowment-style portfolios, including funds of funds and private fund commitments, managed by your advisor with APF oversight | Your choice, but you staff the diligence, capital call planning and tax review yourself, under jeopardizing-investment rules |
White-glove service for complex gifts
Most donor-advised fund sponsors decline closely held stock or take months to review it. APF exists to make the process easy. We work with you, your advisor, and the company's counsel.
A dedicated gift lead
One person owns your gift from first call to grant, and works directly with your wealth advisor, attorney and CPA.
Appraisal coordination
We line up a qualified appraiser and keep the timing inside the IRS window, so the deduction holds up.
Company consent and transfer
We work through rights of first refusal, lockups and board consents with company counsel, and complete the transfer on the cap table.
Tax documentation
We sign Form 8283 and issue your gift acknowledgment promptly, ready for your CPA.
Patient holding
Most sponsors sell gifted shares as soon as they can, often in a discounted secondary. When our investment policy supports it, APF can hold for an IPO, acquisition, tender offer or an appropriate secondary sale, so the upside goes to charity. How our holding policy works
Sophisticated investing after liquidity
Proceeds can go into private equity, venture and credit through funds of funds and direct commitments, managed by your advisor. How we invest
How a private stock gift works
Most of the work happens before the gift is made. Starting early gives you the most room on timing and value.
Introductory call
We talk through the company, your holdings, any expected liquidity event and your giving goals.
Asset review
We review the entity type, share class, transfer restrictions and tax considerations. We confirm whether we can accept the gift, usually with an answer within days.
Fund setup
You open a named or anonymous fund and choose who can recommend grants, including family members and successors.
Qualified appraisal
A qualified appraiser values the shares within 60 days before the gift. A 409A valuation does not meet this standard.
Consent and transfer
The company approves the transfer and records APF as the holder. The gift is complete and irrevocable.
Tax documentation
We sign Form 8283 Section B and send a written acknowledgment for your return.
Liquidity and investment
APF can sell shares through an IPO, acquisition, tender offer or secondary sale, consistent with transfer restrictions and our investment policy. Proceeds are invested in the strategy you've chosen.
Grantmaking
You recommend grants to any qualified charity on your schedule, publicly or anonymously.
Give before the deal is certain
If a sale is effectively locked in when you make the gift, such as a signed merger agreement or completed shareholder vote, the IRS can tax the gain to you anyway. Gifts made before a binding agreement keep the full benefit. If a transaction is in discussion, contact us now.
Our holding policy
We don't force early sales. We also hold within the rules that keep your deduction and APF's charitable status secure. Here's how that works.
How long will APF hold my shares?
Typically through the company's IPO, acquisition or a tender offer at a fair price. APF's board reviews each concentrated position against a written investment policy, and documents the reasons to keep holding at each review. We won't sell into a discounted secondary just to create cash.
Can I decide when the shares are sold?
You can recommend timing, and we'll take it seriously. The final decision belongs to APF. This isn't a formality: if a donor keeps control over a gifted asset, the IRS can reduce or deny the deduction. We can't sign any agreement that requires APF to hold or to sell.
Who votes the shares?
APF votes independently. Gifted shares can't be used to help a donor or family keep control of a company. That would raise self-dealing concerns and put the deduction at risk.
What are the excess business holdings rules?
Section 4943 applies to donor-advised funds as well as private foundations. APF's holdings in a company, combined with yours, your family's and entities you control, generally can't exceed 20% of its voting stock, or 35% if an unrelated party has effective control. Holdings of 2% or less are generally exempt. If a gift pushes combined ownership over the limit, APF has five years to reduce the excess. For most founders and early employees, the limit never comes into play. For larger stakes, we model it before the gift so the holding plan is clear from day one.
How are fees and grants handled before liquidity?
Private shares don't produce cash. We agree on an approach up front, usually a cash contribution alongside the stock that covers fees and lets you start recommending grants right away.
What if the company never reaches liquidity?
The value of the shares in your fund falls with the company. The deduction you claimed at the time of the gift is unaffected. We talk through this risk before every gift so expectations are clear.
What we accept
C corporation stock
Founder shares, preferred stock and exercised options in venture-backed companies. The most straightforward gift.
Pre-IPO and pre-sale shares
Shares in companies preparing for an IPO, direct listing or acquisition, gifted before the deal is binding.
Public and restricted stock
Concentrated public positions and Rule 144 or lockup-restricted shares.
LLC and partnership interests
Fund interests and operating LLCs. We review for unrelated business income and debt before accepting.
S corporation stock
Taxable to the charity on sale, so we plan the structure with your advisors before the gift.
Other complex assets
Real estate, carried interest and digital assets, reviewed with your advisors.
A team of experts to ensure a smooth process
APF's team includes investment professionals from Goldman Sachs and executives from leading public foundations. We work alongside multi-family offices and RIAs serving families in the innovator economy.
Most sponsors were built for simple donations of cash and public securities. We were built for the cap table.
Planning a gift before your company's liquidity event?
Advisors and families can reach us directly. We'll tell you quickly whether we can take the gift and what it will take.
Email hello@americanpf.org