NVIDIA's Rise Brings 'Jackpot' to Jensen Huang Foundation... Where Will the Donations Go?

CEO Hwang Couple's Foundation Holds 69 Million Nvidia Shares
Stock Value Increased from $1 Billion in 2022 to Over $8 Billion Now
Most Donations Managed Through Tax-Advantaged DAF

Global charitable organizations are showing great interest in the donation assets of Nvidia, whose stock price has surged amid the artificial intelligence (AI) boom. Jensen Huang, Nvidia's CEO, has steadily donated Nvidia shares to his personal foundation for charitable activities over the past 20 years, with the value estimated to have exceeded $8 billion (approximately 11 trillion KRW).

Jensen Huang, CEO of NVIDIA
Photo by AFP Yonhap News

According to Bloomberg News, the Jensen Huang & Lori Huang Foundation reported holding about 69 million Nvidia shares as of the end of 2022. The tax filing submitted by Nvidia at that time listed the value of those shares as $1.01065 billion. However, with Nvidia's stock price soaring since then, the value of the holdings has risen significantly. John Seitz, founder of FoundationMark, a firm that investigates foundation investment performance, estimated that "the value of those shares exceeds $8 billion."

Nvidia's stock price rose from $5.9 (adjusted for stock splits) on January 2020, just before the COVID-19 pandemic, to $14.61 at the end of December 2022, and surged to $123.99 as of the 27th (local time). The rise in stock price is believed to have rapidly increased the value of the shares held by the foundation. Due to the stock price surge, CEO Huang's net worth also skyrocketed from $13.3 billion at the end of December 2022 to $119 billion in June this year.

The foundation also donated Nvidia shares worth $4.4 billion to Schwab Charitable, a charitable organization operated by Charles Schwab, the largest securities firm in the United States, which is managing the funds. Some of these are managed through a Donor Advised Fund (DAF) that operates funds from donations and distributes the proceeds to places designated by the donor. CEO Huang and his wife named this DAF account the GEForce Fund, after the name of Nvidia's graphics processing unit (GPU).

Bloomberg reported, "With Nvidia's stock price soaring over the past two years, there has theoretically been a jackpot in the charitable world," adding, "Only CEO Huang and his wife Lori can decide where to send the donations." The Observer, a sister publication of the British daily The Guardian, reported, "Charitable organizations worldwide are showing great interest in where CEO Huang, who has amassed wealth, will send the donations."

CEO Huang decided to donate part of his wealth over 20 years ago and established a foundation with his wife Lori Huang in 2007 to accumulate and distribute donations. From 2007 to 2022, the foundation donated or pledged $65 million to nonprofits such as Stanford University and Oregon State University. Additionally, $125 million worth of Nvidia shares were transferred to the GEForce Fund, a Schwab Charitable DAF.

With Nvidia's stock price recently fluctuating but expected to continue its upward trend, attention is focused on where the foundation's donation funds will be directed. It is known that the Huang couple has operated more than 80% of their donations through DAFs so far. For example, of the $66.3 million donated by the foundation in 2022, $11 million was delivered to nonprofits, and $55.3 million was allocated to DAFs. This is believed to be because DAFs can receive significant tax deduction benefits.

Despite the widespread interest, it is uncertain whether the donation funds will be immediately allocated. Technically, the charitable organization operating the DAF can decide the donation destinations, but experts explain that it is generally the donor who makes the decision. Given Nvidia's rising stock price, there is also the possibility that the organization managing the DAF may decide it is appropriate to hold the shares longer rather than realizing profits immediately.