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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

Anti-Virus, Pro-Longhorn

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."

Sriam Vishwanath

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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A charitable bequest is one or two sentences in your will or living trust that leave to The University of Texas at Austin a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to The University of Texas at Austin, a nonprofit corporation currently located at P.O. Box 7458 Austin, TX 78713 , or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to the university or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to the university as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to the university as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and the university where you agree to make a gift to the university and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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