Business Owners: Long-Term Kingdom Legacy
For many business owners, the ultimate measure of success isn't the size of their personal bank account, but the scale of the impact they leave behind. Strategic Generosity is a governance model that transforms a company from a private asset into a perpetual engine for Kingdom impact.
By transferring ownership into a Purpose Trust or a Charitable Trust, you ensure that 100% of the business’s profits—and its eventual terminal value—are dedicated to eternal impact.
How It Works: The Mechanics of Legacy
When an owner "gives the company away" while it is still operating, they typically utilize a Steward-Ownership model. Here is the general framework:
- Ownership Transfer: The owner transfers 100% of the company’s equity to a specialized trust structure—such as a Charitable Lead Trust (CLT) or a Charitable Remainder Trust (CRT)—designed to manage and distribute assets for Kingdom purposes. This legally separates the right to profit from the right to control.
- Continuous Giving: Instead of dividends flowing to private shareholders, all "excess" profits (after reinvesting in the business and employees) are directed to specific charitable initiatives.
- The Final Gift: The trust’s governing documents specify that if the company is ever sold, the proceeds cannot be pocketed by individuals; instead, the trust receives the proceeds. Because many of these trusts are tax-exempt, the full sale price can be reinvested or given away, bypassing the heavy capital gains taxes (often 20% or more) that would apply in a personal sale.
Why Business Owners Choose This Path
This is more than just a donation; it is a strategic business decision that offers several unique advantages:
- Controlled Succession: Owners can maintain operational control while they are alive (through roles such as a trustee or manager) and ensure the business’s long-term legacy remains aligned with their values after they step away.
- Tax Efficiency: By moving ownership to a charitable vehicle, the business can often significantly reduce or eliminate capital gains taxes upon a sale, ensuring maximum Kingdom impact. This may also provide an immediate charitable income tax deduction of up to 30% of their adjusted gross income.
- Asset Preservation: Assets inside an irrevocable trust are generally protected from future creditors and removed from the owner's taxable estate, minimizing estate taxes for heirs.
Example
Here’s an example of one couple who chose to be radically generous!
