Making A Difference While Making It Big
Giving closely held or private stock to The University of Texas at Austin can make a world of difference in the lives of students, whose futures will grow brighter as your company grows.
What Starts Here Changes the World...
That's especially true for those who invent and innovate by creating new businesses, technologies, products and services. If you own private stock in a company, you have a unique opportunity to make a difference in the world at key moments in that company's life cycle. When a company is started, ahead of an IPO, or just before a sale, you can give private stock to UT and we can ultimately use your gift in a way that's important to you. Alumni might donate stock as a way of giving back to UT, while friends of the university might give to create a strong workforce in their fields or because of the impact UT can have on research critical to their businesses.
A gift of stock might enable you to "double up" on tax benefits. You may claim an immediate charitable deduction on your income tax and avoid capital gains tax on the appreciated value of the donated stock. "This is a way to get 30–40 percent more out of your giving," says one donor. An IRS-approved appraisal of the stock or shares is likely required, but these business events typically require an appraisal.
There are key times in the life of a business when it makes sense to set aside some of the ownership interest for charitable contributions:
- When a company is being formed
- Before an initial public offering (IPO)
- When a company is being recapitalized
- Before the sale, merger or acquisition of a company
- Before an owner or partner in a company exits or retires
Joel Bauman grew up in Georgia and now lives in San Jose, California. But between the two, he stopped for an MBA at UT Austin (2002), and it made an impression on him. Now he and his wife, Anna, are giving back to the university that made such a difference in his life by establishing two funds for the McCombs School of Business — a scholarship for an MBA student and an endowed excellence fund for entrepreneurship. "The professors I had at Texas were amazing. It's a great program to help think through complex business issues. My goal for the funds is to give back so professors and administrators can continue to expand, improve and invest in entrepreneurship with students."
The gift is the result of Bauman's four years at Cylance, an Orange County, California-based company that makes anti-virus software. The company had grown exponentially, and when he left it in 2016, he faced a tricky tax situation. "I had an opportunity to give back to UT by donating some of the stock I earned at Cylance," he says. "UT can potentially benefit from some of the upside of fast-growth private stock, and it also helps from a tax-management perspective." UT's partnership with a community foundation to manage the stock transaction made the process as easy as possible.
"I wouldn't be where I am without the educational institutions I've been to, especially UT. For me, it was a no-brainer to give back like this."
The Philanthropic Professor
Sriram Vishwanath has been an electrical and computer engineering professor at UT since 2003. In 2013 he joined with two faculty colleagues, Joyce Ho and Yubin Park, to form Accordion Health, a company that uses big data to predict individual health outcomes and sells its services to large health care payers like corporations and government agencies.
Vishwanath and his partners gave UT 200,000 shares in their company. One reason for their gift is that the vast majority of the company's employees are Longhorn faculty and alumni. "UT is a fantastic school to teach at and do research," says Vishwanath.
But it's much more than a one-way gift. "This equity seems like a lot," he says, "but it's not the amount you give — it's much more the relationship. Doing this formed a relationship that led to other relationships that were valuable. UT can help in many ways as a door-opener. It made a ton of sense for us to make this gift.
"I want this to be an example that a lot more people will follow," says the professor. "For other people who meet at UT and start companies to give back."
Let's Start Planning to Change the World Together.
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