Jordan Pollack E.A.

the 2 frontier AI labs have been allowing employees to donate shares of equity to a Donor Advised Fund pre-IPO this is a huge planning opportunity typically, you cannot donate highly appreciated securities before they are publicly traded >1 lab is giving employees a choice on which DAF provider to use out of 3 popular options (main choice: pay upfront % to newer entrant DAF co. or pay ongoing % of assets in the DAF to incumbent DAF co.) >1 lab has a private DAF already in place where shares are sent it is not as simple as "transfer shares to my personal DAF and take a deduction" A few things we are thinking about: 1. Holding period matters (a lot) If the shares have been held for more than 1 year, the deduction is generally based on fair market value. If held 1 year or less, the deduction is generally limited to COST BASIS. this essentially defeats the purpose. that makes lot selection very important. 2. You need a real valuation by an appraiser a 409A, tender price, or last funding round does not automatically equal the charitable deduction value. private stock donations and certain crypto holdings generally require a qualified appraisal. and the appraiser may apply discounts for lack of marketability, transfer restrictions, minority ownership, etc...but typically in line with current FMV in my experience 3. Timing matters you want to complete the gift while you are still donating stock If a tender, sale, acquisition, or other liquidity event becomes sufficiently fixed before the donation is complete, you can run into assignment-of-income issues 4. The company has to actually allow (and help coordinate) the transfer Private company shares often come with: >transfer restrictions >ROFR provisions >company consent requirements >repurchase rights >shareholder agreement restrictions the fact that companies like OpenAI and Anthropic are creating a path for charitable transfers removes one of the biggest historical hurdles not every form of equity is equally easy to donate There is a big difference between: >vested common shares >recently settled RSUs >exercised options >unexercised options you need to know exactly what security is being transferred, when it was acquired, and what its basis is expect additional diligence, legal documents, company approvals, appraisal work, and coordination with the cap table administrator the point? you avoid ALL capital gains that you would have paid by selling the equity outright AND a charitable deduction on your tax return, which can be huge Long-term appreciated property donated to a public charity is generally subject to a 30% of AGI (Adjusted Gross Income) deduction limit unused deductions can generally carry forward for 5 years. once the shares are donated, they are gone. the gift is irrevocable. steps are typically as follows: 1. choose a DAF sponsor (if there's a choice) 2. open/fund the DAF with the sponsor 3. obtain company approval and instructions for the charitable transfer and what's allowed 4. decide how much to give and execute stock powers/assignment agreements or electronic transfer documents 5. obtain written acknowledgment from the DAF confirming receipt and contribution date (acknowledgement letter) 6. obtain the qualified appraisal and complete Form 8283 process (company has a big accounting firm do this and pays for it - which is taxable income to employee) 7. coordinate with your accountant at tax filing time to claim the appropriate deduction the more you know...