A recent change in the ownership structure of Torch Technologies has triggered charitable contributions from employees and shareholders.
The company has recently converted to a 100-percent ESOP (Employee Stock Ownership Plan) Trust. Shares of company stock held by employees were sold back to the trust. As a result, a number of shareholders of Torch Technologies have collectively committed to over $1 million in charitable giving. About three-quarters of that total have been contributed through the Community Foundation of Huntsville/Madison County. By partnering with the Community Foundation, employees were able to use a portion of their stock to fund individual charitable accounts called Donor Advised Funds, a process that provides tax benefits.
“Although this transaction created a unique opportunity for some employee shareholders, our employees have always been generous with their time and money,” Torch CEO Bill Roark explained. “It’s been great to see the growth in support that our employees have provided to the community over the years through Torch Helps.”
Torch Helps is a 501(c)3 organization established and run by employee volunteers for the purpose of supporting local charities that serve those in need in area communities.
“When the ESOP transaction came about, we wanted shareholders to be aware of the opportunity to set aside a portion of their good fortune for charitable giving,” Roark continued. “Enabling shareholders to partner with the Community Foundation to donate stock seemed like the perfect opportunity. It was very exciting to see our employees and investors make use of this option. All of this money will eventually be given to charities, whether to Torch Helps or to other charitable organizations chosen by the individual employees.”
Roark went on to say, “We’re very excited to achieve a long-time goal of 100-percent employee ownership, and as we accomplish this transaction, it has been heartwarming to see members of the Torch family–employees, directors and investors–set aside over 1 million dollars that will benefit charities now and in the future.”
“This event underscores the primary goal of the Community Foundation–to increase the overall level of giving in the Huntsville and Madison County area,” Community Foundation Board Chair James Gilbert said. “We do this primarily by educating donors about the tax benefits of giving and by providing tax-advantageous avenues for giving. Contributions to donor-advised funds come with many advantages for the donor.”
As he explained, “In this case in particular, closely held stock can be used to set up a donor-advised fund with the donor realizing a tax deduction for the fair market value of the stock. The donation helps to offset 2011 tax consequences resulting from the sale of other shares of stock. Donor-advised funds are then invested by the Community Foundation, enabling them to grow over time until they are distributed.”
Gilbert concluded, “Donors may make gifts at any time to any 501(c)3, church or government entity in the nation.”