Charities can now fund Trump Accounts, Even With Stock.

Nearly 70 million Trump Accounts, the new tax-deferred investment accounts for children, have been created, including more than 60 million this month through automatic enrollment, CNBC reported. At an Oval Office event on Wednesday, October 7, President Donald Trump urged families to claim them. The next morning, IRS CEO Frank Bisignano told CNBC that several major philanthropic gifts are in the pipeline.

"They range from small to mega," he said. "We do have mega donors in the nine-digit range, you know, bunches of them."

For nonprofits, the document that matters is the set of temporary regulations the IRS and the Treasury published in the Federal Register on September 30. It explains how charities can pay into the accounts, and it opens the door to gifts of publicly traded stock.

Who can give, and how

Only certain bodies can make what the rules call a general funding contribution: states and their subdivisions, the federal government, the District of Columbia, Indian tribal governments, and organizations described in section 501(c)(3). An individual who wants to fund one "must act through an eligible donor, which would generally be a 501(c)(3) organization," the regulations say.

The money goes to the Treasury under an acceptance agreement, and the Treasury pays it in equal amounts into the account of every child in a defined group. The rules allow that group to be an approved class of at least 5,000 children who live in the states or other areas named in the agreement and were born in the years it specifies.

The largest example so far is the Michael & Susan Dell Foundation, which the regulations say pledged $6.25 billion to children born between 2016 and 2024 in qualifying ZIP codes. Michael and Susan Dell attended Wednesday's event, as did Altimeter Capital CEO Brad Gerstner, who has committed to help seed accounts for children in Indiana, CNBC reported. "The list of philanthropists who want to adopt ZIP codes across America, in Texas, in Indiana, in California, is extraordinarily long," Gerstner said.

Stock, with a five-year hold

Earlier guidance allowed only diversified, low-cost index funds in the accounts, CNBC noted. The new rules let eligible donors contribute stock of a U.S. company that is listed on a national securities exchange and free of earlier transfer restrictions. The shares generally cannot be sold for five years, or until the end of the child's growth period if that comes sooner.

The government expects the change to bring in more money. "The Treasury Department and the IRS have been informed that several eligible donors who would not otherwise make cash contributions are prepared to facilitate contributions of appreciated stock similar in magnitude to the general funding contribution of the MSDF," the regulations say, referring to the Dell foundation.

The same document names the cost to children. "To the extent that general funding contributions would have been made in cash and will instead be made as stock, Trump account beneficiaries will bear some additional risk in the form of increased portfolio concentration," it says. Asked about that risk, Bisignano told CNBC that "there will be no concentration risk at all relative to the population." CNBC noted that his comment conflicts with the regulations.

A financial planner at Kitces.com, Ben Henry-Moreland, told CNBC that the rules make giving stock more attractive for donors, largely because founders and shareholders can avoid the capital gains tax they would owe if they sold the shares and gave the cash. "The temporary rules have no impact on the deductibility of contributions of cash or appreciated stock to 501(c)(3) organizations," the regulations say.

What the rules settle for foundations and fund sponsors

Three provisions answer the questions a foundation or a donor-advised fund sponsor would ask first.

1. Exempt purpose. A 501(c)(3) that makes a qualifying contribution furthers its exempt purposes, whether it gives directly or through a donor-advised fund.
2. Deductions. A person who gives to a 501(c)(3) to fund a qualifying contribution can deduct the gift under section 170, subject to that section's other requirements.
3. Expenditure responsibility. A qualifying contribution is not a grant to an individual under the private foundation rules or a distribution to a natural person under the donor-advised fund rules. Where expenditure responsibility would otherwise apply, the donor is treated as having exercised it.

The regulations are temporary. They apply to tax years beginning on or after January 1, 2026, and expire on September 30, 2029. A matching proposed rule is open for public comment until November 30.

Before your organization takes part

In our view, four steps come first.

1. Read the agreement, not the announcement. The class of children, the record date and the amounts are set in the Treasury acceptance agreement, so that is where your obligations sit.
2. Check the fit with your mission. A class gift reaches every child in it equally, sorted by birth year and where they live. That suits a broad local goal, but it cannot be aimed at need within the class.
3. Weigh cash against stock. A stock gift is locked for five years, and the Treasury itself says it adds concentration risk for children.
4. Tell donors what is settled. Donors may ask to route gifts through your fund. The deduction and expenditure responsibility rules above are the answers they will want in writing.