The Deed of Equity Gift allows participating companies to donate 1% of their revenue, profits, time and products to bring about positive change.
"Now our very best and brightest Australian startup founders have the structure they need to make a commitment to giving back at the very infancy of their business."
David Ward, APS technical director, who provided assistance to create the Deed and support the first signatory, Andrew Herbert of Cangler, said, “At APS, we’re in the business of making it easier for people to structure their philanthropy and give generously to the causes they care about. I was delighted to provide my technical support to help get this important Deed into the public domain. Now our very best and brightest Australian startup founders have the structure they need to make a commitment to giving back at the very infancy of their business.”
In his blog post announcing the Deed, Mark Reading, Atlassian head of foundation said, “Pledging equity is valuable for all companies, but especially startups, who are interested in giving back, but may have low or even no profit.
However, equity pledges have always been difficult to manage. It’s easy to make a public statement but there’s no legal substance to validate this deep commitment to making a difference. A change in circumstances could mean that a well-intended pledge never translates into non-profit funding. Or it could take years for those funds to be released and distributed.
Pledging equity can also complicate tax issues when Australian companies and founders make a commitment today to transfer share ownership or make cash-equivalent donations years down the track. This can act as a disincentive for startups that would otherwise want to formalise their equity pledge under a deed…The Deed provides a clear legal pathway for founders to formalise their pledge of equity to their chosen non-profits, clearly demonstrating this commitment to employees, customers, and other stakeholders.”
If you’re a startup founder, you can download a copy of the Deed here.