Nvidia stock surge means CEO's foundation must double giving
Charity has to donate twice as much this year as in 2023
Nvidia Corp.'s surging share price has created a challenge for Jensen Huang's charitable foundation: As the stock climbs, so does the amount of money it has to give away.
The Jen-Hsun & Lori Huang Foundation saw its assets, which mostly consist of Nvidia shares, more than triple to $3.4 billion at the end of 2023, according to its newly released tax filing. To account for the growth, it will have to give away at least $120 million this year "- double last year's level, the filing shows.
"They need to be putting more money out the door," said John Seitz, the founder of FoundationMark, a firm that tracks foundations' investment performance.
The foundation named for the Nvidia co-founder and his wife gave away $59.7 million last year, down from $66.3 million in 2022. The vast majority of that went to a different charitable fund run by Huang and his wife, along with $10 million in gifts to his alma mater, Oregon State University. Another large gift of $900,000 went to the American Friends of Magen David Adom to support Israel's version of the Red Cross.
"The Huang Foundation supports higher education, public health and STEM initiatives across the US, alongside local community organizations in the San Francisco Bay area," a spokesperson for the Huangs said in a statement. "By taking a long-term approach, the foundation ensures that its resources will continue to support critical causes well into the future, maximizing its charitable impact over time."
The Internal Revenue Service requires that private foundations give away at least 5% of their assets annually, which can be a moving target for charities that hold fast-rising stocks. The Huangs' foundation met its distribution requirement in 2023 as mandated on its 2022 tax filing, records show.
The foundation's required giving is likely to jump again in 2025, as Nvidia's stock has climbed nearly 200% this year, boosting both its assets and Huang's personal net worth. He's currently the 11th-richest person in the world, with a $124 billion fortune, up $80 billion this year, according to the Bloomberg Billionaires Index.
Based on the 68.5 million shares held by the foundation at the end of 2023, which accounts for Nvidia's June stock split, the foundation would now have around $10 billion in assets. Due to IRS reporting guidelines, the foundation won't report its 2024 financials until November 2025.
Huang's foundation is a very lean operation with him and his wife as the only employees. They each record just one hour of work a week and don't take any compensation.
The bulk of its giving goes to a donor-advised fund, a common giving strategy among billionaires' foundations to meet their annual distribution requirement by effectively moving money from one charitable pool to another. Unlike a foundation, the assets in such accounts can be invested indefinitely because DAFs are classified as public charities, which aren't subject to the IRS' annual distribution requirements.
Filings show that Schwab Charitable, which administers the Huangs' GeForce Fund, controls $4 billion of Nvidia shares, at least some of which are held in GeForce. In 2023, the Jen-Hsun & Lori Huang Foundation gave a stock grant worth $46.5 million to the GeForce Fund, adding to the $125 million they'd given in previous years to the DAF.