Unlock a New Source of Major Gifts: Equity Donations Explained

Unlock a New Source of Major Gifts: Equity Donations Explained

Most nonprofits think about major gifts in terms of checks, wire transfers, or planned gifts. But what if the most transformational donation your organization could receive… isn’t in the donor’s bank account at all?

It’s in their cap table.

Founders and business owners are sitting on their biggest asset: equity. And the surprising part? They don’t have to wait until they sell their company to give.

That’s where early-stage equity donations come in.

What Is an Equity Donation?

An equity donation is when a business owner gifts shares of their company—typically private stock—to a nonprofit or a donor-advised fund (DAF) before they’ve had a liquidity event like a sale or IPO.

These donations are:

• Legally sound

• Massively tax-efficient

• Incredibly high-upside for nonprofits

Thanks to modern tools like Donate Equity, the process is easier and faster than ever—no legal team required on your side.

Why This Changes Everything

Here’s what happens when a donor gives equity before a sale:

✅ No capital gains tax
Instead of selling shares and giving cash (and paying 20–30% in taxes), the donor gifts the shares directly.

✅ Full fair market value deduction
If the shares have been held for over a year, the donor can deduct the full appraised value—even if they only paid pennies for them.

✅ You gain a valuable asset
That stock might be worth $100,000 now—but $1,000,000 in a few years. Your nonprofit benefits from the upside.

This is how a donor with “paper wealth” becomes a transformational funder for your mission—without having to wait years or sell their company.

But Isn’t It Complex?

It used to be.

Now, platforms like Donate Equity handle everything:

• Equity agreements

• Appraisals

• Transfer paperwork

• Coordination with DAFs or foundations

Deals can close in 3–5 days. Nonprofits just receive a notification when it's done—and cash later when the liquidity happens.

The Takeaway

If you serve business owners—even if you’re a small nonprofit—you already have access to the most overlooked form of giving.

💡 You don’t need to wait for a donor to sell.
💡 You don’t need a legal team.
💡 You can receive equity donations—starting today.

Let us show you how.