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A luxurious mansion recently made the news for an unusual reason: Rather than selling his Maryland chateau for millions of dollars, former Washington Commanders co-owner Dan Snyder donated it to charity, according to the Washington Post.
“The transformative gift comes in the form of real estate in Maryland currently listed for sale for $34.9 million,” the American Cancer Society, the recipient, announced in a press release.
Now, the charity plans to sell the megamansion: “Proceeds from the gift will be unrestricted and used to further ACS’s mission,” it said.
The Snyder family are “passionate advocates” for cancer research and Tanya Snyder, wife of Dan, is a cancer survivor, the press release said.
After seeing a lavish home given away, we wondered how a charitable organization deals with an enormous—and expensive—piece of real estate.
First, let’s look at the posh property the Snyders donated.
Maryland mansion
The Snyders’ chateau-style mansion in Potomac, MD, was donated to the American Cancer Society.
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Inspired by an 18th-century French chateau and custom-built in 2004 for the Snyders, the Potomac, MD, mansion first came on the market in early 2023 for $49 million. It was the most expensive home in the state at the time.
It’s also one of the biggest, at 30,000 square feet, and comes with 10 riverfront acres. The property includes a guard house, guesthouse, and staff quarters. Lavish amenities include a gym, spa lounge, office, wine cellar, home theater, and clubroom.
Despite the perks and a royal connection—the land had ties to Jordan’s King Hussein and Queen Noor—the chateau sat on the market. In August, the price was reduced by $14 million.
From seller to donor
The Snyders pivoted to a charitable donation—and that’s where the value of the home can also offer value to the donor.
Donors generally get a tax deduction worth the “fair market value” of the home. According to Realtor.com®, the estimated value of the mansion is around $33 million, not too far off the last listing price.
That value likely figured into the Snyders’ decision to donate the home rather than continue to pay property taxes. The assessed tax value topped $17 million in 2022.
“Donating property to a nonprofit can be a highly strategic move for ultrahigh net worth individuals due to the substantial tax savings and positive publicity associated with such donations,” says Jennifer Lenz, managing director of Dolly Lenz Real Estate. Her agency has represented numerous nonprofits in property sales over the years.
So how does the charity benefit? Once the property is signed over, the nonprofit is responsible for marketing and selling the property.
“Representing a nonprofit is akin to representing a private seller,” Lenz says. “Our primary objective is to assist them in maximizing the value of their asset and securing a deal that best aligns with their objectives.”
Perks and pitfalls
As you might imagine, receiving a gift of real estate and converting it to cash is a bit more complicated than a standard cash donation.
The organization has to be able to handle such a complex transaction, which, with a luxury property, can take time, expertise, and costs.
“‘Generally, if someone’s donating real estate, it’s because the property isn’t appreciating, and even then, it can be difficult to find the right organization to take it,” Kevin Ondik, a tax partner at Friedman Alpren & Green in New York, told Forbes in a past story on the topic.
But for the right organization, there can be a serious windfall.
“Real estate, like other nontraditional gifts, is a great way to make a huge difference in the lives of those we serve, namely cancer patients and their families,” Kael Reicin, chief finance and strategy officer for the American Cancer Society, tells us. “Donating a property can have a bigger impact than if an individual sells the property, incurring transaction costs or taxes, and subsequently donates the remaining value.”
Maximizing charitable returns
Reicin adds that charitable souls should research nonprofits before making a property donation.
“It can also be complicated to receive or manage [a property], and it can take time to sell,” Reicin says. “So a donor will benefit from working with a nonprofit that is experienced and has the right team in place to make sure it’s done right for maximum impact.”
“For the nonprofit, maximizing revenue from a property donation is paramount to fulfill its foundation’s obligations,” Lenz adds. “It’s rare to witness a fire sale in association with a nonprofit transaction.”
She continues, “A potential drawback is the time it might take to sell the asset, during which the nonprofit may be responsible for maintenance, repairs, and other expenses until the property changes hands.”
As for the sales strategy on the Snyder mansion, Reicin notes the American Cancer Society has a “well-established process in place” to handle these types of transactions.
Just like any home seller, the nonprofit will work with “a specialist real estate team that knows the specific market and also understands the market for a particular property type,” Reicin says. “For this property, our process is no different: It takes a great team to find the right buyer.”
The post Dan Snyder Donated His Home, but What Does a Charity Actually Do With a Multimillion-Dollar Mansion? appeared first on Real Estate News & Insights | realtor.com®.
