The Most Impactful Giving Comes Well After the Sale
By: Michael Roth
The journey from employee to solopreneur to true business leader is a long and winding road. Many aspire to own a business, and many who take the leap succeed in operating one. These family firms are the very fabric of our economy, employing anywhere from a few to dozens of people and serving our local communities. A rarer few businesses can thrive long-term without their founder, but the incentives are so great to build an enterprise of this caliber that the wisest builders make that their ultimate goal. This is where the big financial wins come from.
First, reflect back on when you were first excited to hang your own shingle or take over for the prior generation. Often for years prior to taking that entrepreneurial leap you ground it out on the frontlines, on the warehouse floor, or in the “pit” of cubicles where junior team members collaborate and fight for a window seat. You studied, apprenticed, won, lost, and learned resilience. And when the conditions were right, or maybe out of sheer necessity, you made the leap.
For a time, you felt like an imposter. It happened again each time you leveled up your game: with new and more demanding clients, on larger projects that brought more risk, or at social events where the business and social orders were well ingrained and you had to sweat out a new place in the pecking order. In each setting, over time, you grew in relevance, demonstrated your tenacity, and became an anchor in the room. Where you once quietly joined a discussion, you eventually became the cornerstone of it.
And now, it’s time to claim your prize: a potential transaction where your life’s work will transition to a new owner and your own identity will change. While you may have dreamt of this day for a decade or more, you wouldn’t dare plan on it. After all, operating a business has taught you not to “count your chickens until they’re hatched.” So, you quietly may dream of the flashy car, new boat, the island vacation, or simply the comfort of a paid-off mortgage. But you don’t let your dreams venture too far, as life’s taught you that it’s not a done deal until it’s funded.
The problem is, once it’s funded, you’re probably well behind the tax and giving curve. Your transaction is likely to close in the fourth quarter, as many do in the final days of a tax year. In those hectic days between the receipt of funds and the closing of the fiscal year you may be tempted to write a massive check to a great cause such as your favorite school, hospital, or church. It’s generous and tax-wise, and the clock feels like it’s ticking.
But instead, I invite you to think ahead-to first allow yourself to imagine driving your coveted Ferrari through Naples, where either Florida or Italy will do, and those first few months of financial independence. You’ve earned it. But look to those who came before you to see that such pleasures are fleeting. With the mortgage paid off, the college funds set aside, and the celebrations behind you, your multi-decade identity as CEO will fade quicker than you’d imagine. And while your heart may be fuller than ever, your calendar will suddenly be wide open and hungry for relevance again.
It’s for all these reasons that I urge our clients to consider donor-advised funds (DAFs) over lump-sum one-time charitable giving. While family names on buildings and endowed professorships feed the ego for a moment, the opportunity to become the “CEO of your own giving” for years after exiting the Founder-CEO role is a far better choice.
Why? Because you have more to give than just money. Investing your time and energy into strategic giving will bring you satisfaction well beyond seeing your name in lights. Instead of a $2.5 million endowed professorship at Michigan, how much good could you do in your community with checks from $10,000 to $50,000 carefully doled out to those most deserving? One month you could fund a scholarship for aspiring local entrepreneurs. Another month you could provide the headline gift for your alma mater to kick off its annual campaign. Should a friend develop lymphoma, you could make your donation the next to fund focused research that extends their and others’ lives. And should disaster strike, you can make a decisive gift to get aid to those in need within days of the crisis arising.
A donor-advised fund gives you the framework to move from one-time last-minute passive donor to an active philanthropic leader for a decade or more ahead. It allows you to capture the tax advantages today while retaining the flexibility to direct your capital over a lifetime.
Selling your business closes an incredible chapter, but it doesn’t mean your leadership story is over. By treating your philanthropy with the same intentionality, rigor, and passion that built your enterprise, your second act won’t just be about preserving wealth—it will be about deploying it where it matters most.
If you’d like to learn more about this and the other strategies that Randy’s practice facilitates and V&R Advisory enables for Michigan-based entrepreneurs, just reach out.
Mike Roth, Managing Partner
V&R Advisory and Capital
VlasicRoth.com
