BJ GOERGEN: A liquidity event often comes with a question people don't expect to be asking themselves so soon. What do I want this wealth to mean? For a lot of clients, part of the answer involves giving to causes, communities, or institutions that matter to you. But giving well takes the same planning discipline as any other part of your post IPO strategy. So let's talk about the intent behind your wealth. The vehicle that gives you the flexibility you want, and the two decisions that most affect how far your giving actually goes.
Before we talk about tax deductions or fund structures or start-- let's start somewhere a little more personal. What do you want your giving to do? Long before you're readying a company for sale or an IPO, it's worth asking whether your wealth is meant to support a certain lifestyle, to create a community legacy, to build multigenerational stewardship in your family, or simply give your children a strong start along some meaningful impact.
Different intentions require different time horizons, different vehicles, and different strategies, which is why articulating the intent of your wealth up front is more than a soft exercise. It's what makes every subsequent decision easier.
Many of our clients see giving as a way to express their values, to put those values into action, to make a difference in their communities and the broader world, to potentially build a family culture and maybe involve the next generation in something beyond just portfolio construction. A liquidity event is a natural moment to set some of those values in action because you're already rethinking the role that wealth plays in your life.
Once you know your intent, the question becomes, how to give? And for many clients, the answer starts with a Donor Advised Fund or a DAF. I like to think of a DAF as a charitable giving vehicle that's administered by a qualified public charity. You make an irrevocable, tax-deductible contribution to a DAF sponsor, and then you have an account that's put in your name, and you're able to invest and recommend grants to qualifying charities over time.
The mechanics are very simple. There's no start up costs. There are no taxes to pay. No separate tax filings. The J.P. Morgan charitable giving fund handles the record keeping and the administration of those gifts. You get an immediate tax deduction in the year that you contribute, and those assets can grow tax free inside the fund.
I like to think of a donor advised fund as a charitable checking account or a charitable investment account. And you can defer decisions about what charities that you want to support indefinitely. The DAF can exist for your entire life, or it can continue in perpetuity because you'll name a successor advisor, or you can endow it to a charitable beneficiary.
For clients who are approaching a liquidity event, this kind of flexibility is really valuable because you can lock in your deduction during a high income year without having to make all of the decisions on where that money needs to go. For most of our clients with appreciated shares, the answer is stock. Here's why.
Unlike gifts to family, where you want to give when values are low, gifts to charity are usually most powerful when made with highly appreciated assets. Your charitable deduction is generally based on fair market value, and any embedded appreciation on shares you donate can permanently avoid capital gains tax. That's two big benefits in just one move.
The key rule is the holding period. Security is held more than one year allow a deduction based on fair market value. For those that are held less than one year, your deduction is limited to cost basis. Cash gifts, by contrast, simply yield a deduction equal to the amount contributed. No embedded gain benefit. So if you're sitting on appreciated stock post lockup common shares, donating those shares is meaningfully more efficient than selling first and donating the cash later.
And this is where it gets interesting and where planning really pays off. Post IPO, after the long term holding period is met, is generally the most favorable timing for appreciated stock gifts. You get a fair market value deduction and no capital gains on the donated appreciation. It's clean, it's simple, and it's tax efficient.
Pre-IPO gifts are possible, and they're sometimes very powerful because you can contribute private shares to a donor advised fund before the transaction. And the DAF can then participate in the IPO and hold or liquidate within the fund. But there are a few meaningful hurdles to think about. Valuation is often difficult, there are transfer restrictions that may block the gift, and the IRS requires a qualified appraisal. And if the liquidity event is already sufficiently fixed, the anticipatory assignment of income doctrine may affect the tax treatment.
The J.P. Morgan charitable giving fund typically needs 2 to 4 weeks for due diligence. It cost of roughly $4,000 to $6,000 with a $500,000 minimum of private shares. There's one more timing note. It often makes sense to cluster or combine your giving into the high income year of the sale or IPO. A large charitable contribution in one year can offset a large income event, but the donor advised fund must be established and funded by December 31 to capture that year's deduction.
And as of 2026, be aware that there is a new 0.5% AGI floor on charitable deductions and roughly a 5.4% overall haircut on itemized deductions for top bracket filers. That changes the math, and it reinforces the value of frontloading your gifts.
Giving around a liquidity event isn't a footnote to your financial plan. It's often one of the most meaningful parts of it. So start with intent. Choose a giving vehicle like a donor advised fund that gives you flexibility, consider donating appreciated stock instead of cash where you can, and think carefully about timing so that your generosity can do as much as possible. Your J.P. Morgan advisor can help you build a giving plan that reflects both your values and your tax picture.
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Text: JP Morgan Private Bank. Wealth planning and advice. BJ Goergen, Head of JP Morgan Private Advisory.
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BJ GOERGEN: A liquidity event often comes with a question people don't expect to be asking themselves so soon. What do I want this wealth to mean? For a lot of clients, part of the answer involves giving to causes, communities, or institutions that matter to you. But giving well takes the same planning discipline as any other part of your post IPO strategy. So let's talk about the intent behind your wealth. The vehicle that gives you the flexibility you want, and the two decisions that most affect how far your giving actually goes.
Before we talk about tax deductions or fund structures or start-- let's start somewhere a little more personal. What do you want your giving to do?
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Text: The softer side of giving. Intent Before Mechanics.
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Long before you're readying a company for sale or an IPO, it's worth asking whether your wealth is meant to support a certain lifestyle, to create a community legacy, to build multigenerational stewardship in your family, or simply give your children a strong start along some meaningful impact.
Different intentions require different time horizons, different vehicles, and different strategies, which is why articulating the intent of your wealth up front is more than a soft exercise. It's what makes every subsequent decision easier.
Many of our clients see giving as a way to express their values, to put those values into action, to make a difference in their communities and the broader world, to potentially build a family culture and maybe involve the next generation in something beyond just portfolio construction. A liquidity event is a natural moment to set some of those values in action because you're already rethinking the role that wealth plays in your life.
Once you know your intent, the question becomes, how to give? And for many clients, the answer starts with a Donor Advised Fund or a DAF.
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What is a DAF? Donor-Advised Fund Basics.
(SPEECH)
I like to think of a DAF as a charitable giving vehicle that's administered by a qualified public charity. You make an irrevocable, tax-deductible contribution to a DAF sponsor, and then you have an account that's put in your name, and you're able to invest and recommend grants to qualifying charities over time.
The mechanics are very simple. There's no start up costs. There are no taxes to pay. No separate tax filings. The J.P. Morgan charitable giving fund handles the record keeping and the administration of those gifts. You get an immediate tax deduction in the year that you contribute, and those assets can grow tax free inside the fund.
I like to think of a donor advised fund as a charitable checking account or a charitable investment account. And you can defer decisions about what charities that you want to support indefinitely. The DAF can exist for your entire life, or it can continue in perpetuity because you'll name a successor advisor, or you can endow it to a charitable beneficiary.
For clients who are approaching a liquidity event, this kind of flexibility is really valuable because you can lock in your deduction during a high income year without having to make all of the decisions on where that money needs to go. For most of our clients with appreciated shares, the answer is stock. Here's why.
(DESCRIPTION)
Should I donate stock or cash. Match the Asset to the Strategy.
(SPEECH)
Unlike gifts to family, where you want to give when values are low, gifts to charity are usually most powerful when made with highly appreciated assets. Your charitable deduction is generally based on fair market value, and any embedded appreciation on shares you donate can permanently avoid capital gains tax. That's two big benefits in just one move.
The key rule is the holding period. Security is held more than one year allow a deduction based on fair market value. For those that are held less than one year, your deduction is limited to cost basis. Cash gifts, by contrast, simply yield a deduction equal to the amount contributed. No embedded gain benefit. So if you're sitting on appreciated stock post lockup common shares, donating those shares is meaningfully more efficient than selling first and donating the cash later.
And this is where it gets interesting and where planning really pays off.
(DESCRIPTION)
Should I donate before or after the liquidity event? Timing Considerations.
(SPEECH)
Post IPO, after the long term holding period is met, is generally the most favorable timing for appreciated stock gifts. You get a fair market value deduction and no capital gains on the donated appreciation. It's clean, it's simple, and it's tax efficient.
Pre-IPO gifts are possible, and they're sometimes very powerful because you can contribute private shares to a donor advised fund before the transaction. And the DAF can then participate in the IPO and hold or liquidate within the fund. But there are a few meaningful hurdles to think about. Valuation is often difficult, there are transfer restrictions that may block the gift, and the IRS requires a qualified appraisal. And if the liquidity event is already sufficiently fixed, the anticipatory assignment of income doctrine may affect the tax treatment.
The J.P. Morgan charitable giving fund typically needs 2 to 4 weeks for due diligence. It cost of roughly $4,000 to $6,000 with a $500,000 minimum of private shares. There's one more timing note. It often makes sense to cluster or combine your giving into the high income year of the sale or IPO. A large charitable contribution in one year can offset a large income event, but the donor advised fund must be established and funded by December 31 to capture that year's deduction.
And as of 2026, be aware that there is a new 0.5% AGI floor on charitable deductions and roughly a 5.4% overall haircut on itemized deductions for top bracket filers. That changes the math, and it reinforces the value of frontloading your gifts.
Giving around a liquidity event isn't a footnote to your financial plan. It's often one of the most meaningful parts of it. So start with intent. Choose a giving vehicle like a donor advised fund that gives you flexibility, consider donating appreciated stock instead of cash where you can, and think carefully about timing so that your generosity can do as much as possible. Your J.P. Morgan advisor can help you build a giving plan that reflects both your values and your tax picture.
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JP Morgan Private Bank.
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