Standard Restricted Stock

Fact Sheet

Terms:

Any amount of Restricted Stock can be donated

Selected Features

Does not deplete cash reserves

Provides 100% protection against the long-term capital gains tax due

Provides a 100% tax deduction equal to the value of the stock at the time of the contribution

Increases gift-giving potential through First Bridge Foundation’s connections

Increases gift-giving potential through 144+’ leveraged approach

Increases gift-giving potential through 144+’ leveraged approach

Description

Making a direct donation of Restricted Stock to charitable organizations is a rather regular occurrence. Most major charities have the mechanics set up to facilitate the transaction in a relatively short period of time.

The main benefits of this program are that you can use your illiquid stock as a donative tool without paying long term capital gains tax (23.8%) and without reducing your cash reserves that can be used for other purposes.

The drawbacks to this program are (a) the donor gives up the rights to their stock in return for the tax write-off, (b) the transactions can be somewhat complex, and (c) not all stocks are eligible.

Comparison

The comparison below compares what happens when a Restricted Stock owner (a) does nothing, (b) makes a standard Restricted Stock donation, or finally, (c) makes a donation to First Bridge Foundation (PC) with his or her Restricted Stock using the concepts developed by First Bridge Foundation.

Donation Do Nothing Standard RS Donation PC RS
Ability to make a donation with “Illiquid” Securities NA Yes Yes
Alleviates long-term capital gains tax No Yes Yes
Preserves cash for other purposes Yes Yes Yes
Supports Charity No Yes Yes
Ability to leverage donation No No Yes