How To Give Like Mark Zuckerberg

In his mid-30s Georgia lawyer Bertis Downs, the longtime manager of rock band R.E.M., started buying fine red wines, mostly early Bordeaux. Over time his tastes changed. He stopped drinking red wine much, but he still had 30 cases, including some 1982 Mouton Rothschild, in his cellar. "I thought, ‘I'm never going to drink this,'" says Downs, now 54. "‘I'm never going to have enough parties to use it. It's a wasting asset.'"

Rather than hassle with liquidating this most illiquid of liquid assets himself, Downs donated it. Bryan Clontz, a charitable middleman, took bids from wine dealers, shipped the cases to Hong Kong and transferred $150,000 into a donor-advised fund at Fidelity Charitable Gift Fund. From there Downs and his wife, Katherine, direct grants to their favorite charities. If you're feeling generous, look at all your assets. These days you can convert everything from real estate to private company stock to hedge fund shares into a charitable kitty. Moreover, depending on what you give, to what kind of charity and how you time your donation, you may get a much more valuable tax break than if you'd just given cash.

For Complete Coverage of America's 200 Largest Charities click here.

Then there's a more mature entrepreneur, Washington State University plant physiologist Larry Schrader, 69. After his research established that sunburn was damaging 10% of the state's apple crop, Schrader developed Raynox, a carnauba-wax-based apple sunburn protectant.Example: Billionaire Facebook founder Mark Zuckerberg is funding his $100 million commitment to Newark, N.J. schools by donating stock to a supporting organization (a rich man's donor-advised fund) at the Silicon Valley Community Foundation, a public charity. If he'd sold $100 million in Facebook shares and donated cash, Zuckerberg would have had $100 million in taxable capital gains (assuming he has a near-zero basis in the stock), plus a $100 million tax deduction--a wash. If he'd given $100 million in stock to a private foundation (meaning one Zuckerberg funds and controls himself ), he wouldn't have had any taxable income, but the deduction would have been limited to his basis in the stock--zero. By giving private stock to a public charity, Zuckerberg gets the best of both worlds taxwise. He doesn't recognize any income and he gets a $100 million deduction.

"The only way I could figure out to commercialize it was to create a startup company," Schrader says. With a partner, he started FruitGard, LLC. Just before selling FruitGard (to the company that now markets Raynox worldwide) in 2008, they donated 29% of its stock to the Vanguard Charitable Endowment Program. The key: The men made their donation before inking the sale, which allowed them to take a full deduction for the stock's value, without recognizing a taxable gain. Schrader and his wife, Elfriede Massier, now make grants to such Forbes 200 charities as the Salvation Army,Habitat for Humanity International and Doctors Without Borders, as well as a local land preservation trust.

Tax savings aren't the only reason folks donate assets these days, notes Clontz. In some cases they're dialing back on consumption. "We're getting contributions where a family is saying, 'We don't need that fourth house anymore,'" he says. If you've got assets to give, here's what you need to know.