Giving Strategies for Your Business Owner Clients

From Profit to Purpose

As a professional advisor—whether in tax, estate planning, or financial management—you understand the complexities and opportunities involved in helping your clients build and preserve wealth. When your clients are business owners, these opportunities often extend into sophisticated charitable planning strategies that can maximize both financial and philanthropic outcomes.

Recent insights from The Wall Street Journal reveal that the “stealthy wealthy”—the highest earners in the U.S.—derive much of their income not from high-profile careers but from ownership of medium-sized regional businesses. These entrepreneurs often have a strong philanthropic spirit: studies indicate that over 90% of small business owners have supported charities and community initiatives in the past year.

This combination of wealth and charitable intent underscores the importance of strategic guidance. As trusted advisors, your role includes helping clients navigate complex tax laws, valuation challenges, and timing considerations to optimize their giving. That’s where Greater Houston Community Foundation can serve as your strategic partner—providing personalized service and a deep understanding of charitable giving involving closely-held business interests.

Why Partner with Greater Houston Community Foundation?

The Community Foundation is more than just a conduit for charitable gifts—we are a dedicated partner committed to helping advisors and their business owner clients develop thoughtful, effective philanthropy strategies.

Here’s how we add value:

1. Specialized Expertise in Business-Related Charitable Gifts

Many clients have established private foundations, but from a tax and operational perspective, donating closely-held stock or interests to the Community Foundation often offers superior benefits. Private foundations are subject to more extensive IRS regulations, excise taxes, and administrative burdens. Conversely, gifts to the Community Foundation are generally more straightforward, flexible, and tax-efficient.

The Community Foundation’s team of philanthropic advisors can guide you through the nuances, helping your clients understand that:

• Tax Deduction Advantages: Donating closely-held stock to the Community Foundation typically allows a deduction of the full fair market value (up to 30% of adjusted gross income), with no capital gains tax on the appreciated value. This maximizes the tax benefit of the gift while supporting your clients’ philanthropic goals.
• Administrative Simplicity: We handle all the paperwork and compliance, reducing your clients’ administrative burden.

2. Strategic & Timely Planning for Business Owners

Timing is critical in charitable giving that involves business interests. Gifts made after sale negotiations or acquirer discussions have begun can be jeopardized, risking disallowed deductions or unintended tax consequences.

Our team emphasizes early planning—ideally before any deal is in motion—to:

• Ensure the gift and sale are treated as separate transactions to avoid the IRS’s step transaction doctrine.
• Maximize the value of the charitable deduction by aligning the gift with proper valuation and documentation.
• Help clients avoid capital gains taxes on appreciated stock, preserving more of their wealth for both their philanthropic and financial objectives.

We work closely with you and your business owner clients to develop customized timelines and strategies that fit their unique circumstances.

3. Valuation & Compliance Support

An accurate valuation of closely-held business interests is vital for maximizing deductions and maintaining compliance. The recent Supreme Court decision in Connelly v. United States highlights the evolving landscape, clarifying that life insurance proceeds are included in the value of a business interest without offsetting redemption obligations, which could lead to higher estate valuations.

Working with experienced appraisers and allowing sufficient time for proper valuation is essential. By ensuring proper valuation at the time of contribution, your clients can potentially avoid costly pitfalls and optimize their tax benefits.

A Partnership Built on Trust & Local Expertise

At the Community Foundation, we take pride in understanding Houston’s unique economic and community landscape. Our personalized service includes dedicated philanthropic advisors who will work closely with you to craft strategies aligned with your clients’ values, financial goals, and charitable aspirations.

We recognize that each client’s situation is unique. Whether they’re considering a gift of a business interest, establishing a donor advised fund, or creating a legacy plan, our team offers tailored solutions backed by local knowledge, legal expertise, and a commitment to excellence.

Your First Call for Charitable Planning Support

Whenever charitable giving becomes part of your client conversations, remember that Greater Houston Community Foundation is your trusted partner, ready to provide:

• Tailored solutions to meet your clients’ unique charitable and financial needs
• Best-in-class resources, education, programming, and peer connection
• Personalized guidance for families in the stewardship of philanthropy and community impact across generations
• Support in developing long-term legacy and estate plans
• Peace of mind by offering third-party investment management for funds of $500,000 or more

Most importantly, we’re here to empower you to serve your business owner clients better, providing peace of mind and confidence that their philanthropic goals are in capable hands.

Let’s Work Together

At Greater Houston Community Foundation, we’re more than a resource—we’re your strategic partner in unlocking the full potential of your clients’ philanthropic and financial goals. With our expertise, personalized guidance, and deep understanding of Houston’s community landscape, we help you deliver impactful, tax-efficient giving solutions that stand the test of time.

Whether your clients are contemplating a gift of a business interest, looking to establish a legacy, or simply exploring their charitable options, we are here to support you every step of the way. Together, we craft tailored strategies that maximize tax benefits, ensure compliance, and create lasting community impact—benefiting your clients today and for generations to come.

Take the Next Step

Don’t let complex charitable planning challenges hold your clients back. Reach out to Andrea Mayes, Senior Director of Charitable Solutions, today for a confidential consultation and discover how our team can help you elevate your advisory services with innovative, compliant, and impactful giving solutions.

Our team is committed to being your trusted resource in philanthropy—because when your clients succeed, so does our community.

More Helpful Articles by Greater Houston Community Foundation:

• DAFs & Private Foundation’s: Addressing Common Misconceptions
• How To Set Up a Donor Advised Fund
• Scholarships and Economic Mobility
• Why Donating Appreciated Stock Makes Financial Sense

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