A windfall from an IPO can be a once in a lifetime opportunity to be exceptionally generous. Think about it: you normally manage your expenses relative to your income, and you now have a source of additional wealth.
The decision of how much to give away is a personal choice guided by your values. It may be helpful to consider a few questions:
What amount aligns with my values?
Some people tithe, giving 10% of their earnings away each year for religious or values-driven reasons. For others, giving a certain amount away above what they need to live on is a moral choice.
What’s my optimal giving level from a tax perspective?
Consider the tax benefits of donating and prepare to give the optimal level - or more! In high income years, donation “bundling” can be an effective strategy for you to be able to give more away and realize a larger tax benefit for doing so.
How much are others giving?
On average, Americans donate 3-5% of their adjusted gross income each year. Windfall events can inspire greater generosity, and we’re hoping this pledge encourages the Airfam to give more than they would ordinarily. Our friends at Founders Pledge shared that members who’ve joined their global community in 2020 have generously pledged to give an average 12% of their exit proceeds to charity!