A Look at How an Off-the-Chart IPO Market Can Translate into a Dramatic Uptick in Charitable Giving

Earlier this month, CNBC reported on the potentially “record-breaking” IPO market this year, outlining the IPOs that have yet to come for the remainder of 2021. There was a gigantic upswing in IPOs in 2020 despite the pandemic – and 2021 is clearly continuing the trend. 

With billions of IPO value out there, it creates overnight wealth as well as the accompanying need to address tax implications. That’s an opportunity to make a huge social impact for this new generation of high net worth founders and employees.

Many of these first-time, large-scale philanthropists will seek to make a difference with causes dear to them. Indeed, many recent studies have shown that these individuals often think first of social impact. Yes, they still factor in the need to avoid taxes as well – and they have several options for best aligning their “impact investing” and tax strategies. 

Regardless of their specific approach, it’s a win-win. For example, they can use IPO proceeds to arm a nonprofit with instant cash, donate stock directly, or they can choose to create a fund that offers a mix of short-term and long-term donations for the organization.

A Donor-Advised Fund (DAF) arms high net worth individuals with the ability to personally remain involved and even pass along that same opportunity to heirs. With potentially thousands of new millionaires spawning from the steamy hot IPO market, that can translate into countless new, long-term social impact opportunities coming at a rate that is rarely seen.


Learn more in RenPSG’s IPO Opportunity white paper available here.