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3 Keys to Charitable Giving with Equity Compensation, Ep 13

Today's topic is something I'm seeing more frequently with clients using charitable giving with some of their equity compensation positions. This is a great way to hit your charitable goals. There are a few tips to doing it properly so today I'm going to cover three keys to charitable giving with equity compensation. 

You might have noticed a little change— well maybe it’s a big change— I’ve decided to change the name of the show. I’ve also dropped the sales tip section but you will learn more about why when you listen to the episode. Going forward the bulk of the episodes will focus on equity compensation and how to use it effectively to achieve your financial goals.


You will want to hear this episode if you are interested in...

  • Why the podcast has a new name [0:22]

  • Many forms of charitable giving [2:00]

  • First tip: Positions need to be fully vested [3:17]

  • Second tip: DO NOT sell the stock before donating it [4:52]

  • Third tip: Should you donate one lump sum or stretch it over time? [9:18]

  • This week’s FLASHBACK[11:29] 

Charitable giving can take many forms

Some people have the ability and would like to leave a large legacy. Perhaps a school they attended or church they're a member of or some other kind of nonprofit they've supported over the years. Other times it can be something smaller, but still a significant donation. Right now five-year campaigns through your church seem to be popular in my neck of the woods. Regardless of the size of the gift using equity compensation positions to fulfill your charitable goals is a wonderful gift, if done right. If you’re wondering if you’re doing it right you should definitely check out this episode.

Tip 1 of 3: Fully vested positions 

The positions need to be vested. This means you must have full control of them. As a reminder, check the vesting schedule from your employer's equity compensation plan document to verify how your stock vests. Some vesting is immediate. Some after a set period of time or objectives are met. Others are graded where you're gradually getting a certain percentage every year over a set time period. Most company plans do not allow for non-qualified stock options— better known as NSO's or sometimes NQSOs— to be donated to charities. This is because they result in taxation to the donor/holder upon exercise even though the individual is no longer the owner. Find out more about this and get the other two tips when you listen to the episode!

The best live song I’ve ever experienced 

The best song I've ever seen live is Three Days by Jane's Addiction. It was a lifetime ago and just before they became super popular. Three Days is a long song, over 10 minutes, and there is a long drum solo during the song but this is what made it so great. Stephen Parkins, the drummer of Jane's Addiction had long dreadlocks and during his solo, he did the head motions that many drummers do where they bang their head back and forth. However, he took it one step further and had a spotlight on the ground behind him, which silhouetted him as he drummed away his long dreadlocks were flying everywhere, but at rhythm with a song. It was unlike anything I had ever seen and I have never been to a show like this before. No single song I've seen live since has come as close to being as impressive as this one experience.


Resources & People Mentioned