Daffy.org, a fintech platform geared towards charitable giving, has unveiled a new program allowing employees of private companies to donate their private stock to charitable causes.
In what the tech firm describes as a first of its kind, Daffy's private stock donation program is designed to convert private stock into charitable donations. Figma, a design software company, is taking a pioneering role in implementing the program for its employees.
The program comes at a time of transformation in the landscape of company ownership. Over the last 20 years, the number of US-listed public companies has plunged by more than half, while private companies have proliferated.
Unicorns aren't as rare as they once were: by at least one count, there are now over 700 unicorns – private companies valued at over $1 billion – across the US, collectively worth more than $2.2 trillion. This growth in private companies means more employees receive private stock as compensation, but many struggle to access liquidity or meet financial obligations while these stocks remain unsellable.
In response to this, companies are increasingly conducting tender offers to provide liquidity for employees. Some of the top valued startups participating in these offers include ByteDance, SpaceX, and Stripe. Daffy's Private Stock Donation Program complements these efforts by giving employees the ability to donate shares either during or after such liquidity events, transforming stock into charitable contributions while also offering tax savings.
“As more private companies conduct tender offers to provide liquidity to their teams, every company should offer a private stock donation program,” Adam Nash, co-founder and CEO of Daffy, said in a statement. “This not only improves employees’ financial outcomes, but also unlocks billions for charity.”
Historically, donating private stock was largely limited to wealthy founders, board members, and venture capitalists. Daffy’s new program simplifies the process, making it more accessible to a broader group of employees.
Praveer Melwani, CFO of Figma, expressed enthusiasm about the program launch at his company.
“Giving Figmates more ways to support causes they care about makes an impact that extends beyond our company and community,” Melwani said, referring to the company's internal moniker for participants in the program.
Through its new program program, Daffy says employees can donate the full value of their private stock, qualify for income tax deductions, and avoid capital gains taxes on appreciated shares.
Daffy also offers a donor-advised fund through a user-friendly platform, allowing employees to grow their contributions tax-free and donate whenever they choose. Those features make DAFs an ideal vehicle for peope to amplify their giving, with one study indicating they lead to a 96% increase in annual giving among donors who use them.
The Private Stock Donation Program is part of Daffy for Work, which provides employers with tools to enhance employee charitable giving. Employers can also match donations or contribute directly to employee funds, making it easier for workers to engage in philanthropy.
The launch of Daffy's new charitable giving program comes shortly after Janney Montgomery Scott, which was recently acquired by KKR, announced its own venture into the DAF space with its own in-house charitable giving fund for its advisors and their clients.
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