Jack Dorsey selling 7% of his Square stock, with some proceeds going to fund his foundation

Square announced today that its chief executive, Jack Dorsey, will be selling approximately 7 percent of his stock over the next 12 months. The move is designed for “financial and tax planning purposes,” but will also allow Dorsey to invest more into his Start Small Foundation.

Established prior to Square’s IPO, the Start Small Foundation invests in artists, musicians, and local businesses in underserved communities around the world. Dorsey had previously committed to giving a portion of his equity to potential Square customers. As the majority shareholder — with more than 71 million shares, or 24.4 percent — he has pledged to provide opportunities for those struggling to gain a foothold, including underserved small businesses.

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To date, Dorsey has already given 15 million shares, or 20 percent of his equity, back to the company, and he has committed to giving an additional 40 million shares to the Start Small Foundation.

Of course, Square announcing that its CEO is giving up shares could make investors wary, but the idea that he’s giving the proceeds to the Start Small Foundation could ease concerns. Shares in the company dropped 2.59 percent for the day and are down 0.50 percent in after-hours trading.