Giving through the Community Foundation offers donors:
- Flexibility: Donors may create funds in any name & for any charitable purpose.
- Immediate Tax Deductions : As a 501(c) (3), the Foundation helps save on income and estate taxes and helps reduce/eliminate capital gains tax.
- Connectivity: Donors stay connected to their gift, their family and their favorite charities.
- Personalized Service: Knowledgeable, professional staff provide prompt attention to donor needs.
- Community Information: The Foundation is a resource for donors about local nonprofit organizations and community needs.
- Investment Expertise: Experienced board and committee members, and financial advisors oversee investments and relieve donors of that burden.
- Low Cost: Combining individual funds, keeps administrative and investment costs low.
- Reliability: The Foundation has a record of reliability and dependability.
- Simplicity: A fund is established with one governing document that takes less than one hour to prepare.
- Recognition: Donors can honor or memorialize a loved one in perpetuity.
- Privacy: Donors can give anonymously through the Foundation.
- Legacy: Donors can build lasting testaments to their names, their families and causes they care about.
Community vs. Private Foundation
|Community Foundation||Private Foundation|
|Ease of Creation||Execution of simple Fund Agreement is all that is required.||Involves creation of a new organization, application for tax-exempt status, and expenditure of time and money.|
|Tax Benefits||Taxpayer can deduct up to 50% of adjusted gross income for cash gifts.
Full fair-market value of gifts of appreciated property is deductible up to 30% of adjusted gross income.
|Cash gift deduction is limited to 30% of adjusted gross income.Only the cost basis of certain types of appreciated property is deductible, and deduction is limited to 20% of adjusted gross income.|
|Excise Tax||No excise tax is paid.||1-2% excise tax must be paid on net annual income.|
|Accounting, Investment, Audit and Tax Returns||Community Foundation handles all investments and accounting, files annual tax returns, and provides annual audit.||Trustees must handle all investments and accounting as well as comply with detailed reporting requirements.|
|Investments||No federal investment requirements and no equity concentration restrictions.||Certain types of investments prohibited, and the foundation may not own more than 20% equity interest in a business.|
|Distributions||No minimum payout requirement.||Approximately 5% of net asset value must be paid out for charitable purposes annually.|
|Anonymity||Donors' names may remain anonymous to the public.||Names and addresses of contributors must be made available to the public.|
|Costs||Administrative and investment costs are shared and kept at a minimum.||Administrative costs can be costly.|
Effective January 1, 2012, the CFNF Annual Administrative Fee shall be as follows:
- 1.5% on the first $3 million (except that funds with a balance of less than $50,000 incur an administrative fee of the greater of $350 or 1.75 %.)
- 1.0% on the next $3 million
- 0.80% on the next $3 million
- 0.60% on the next $3 million
- 0.40% on the balance in the fund
Processing Fee on Non-Endowed Gifts
Non-endowed gifts to donor advised funds are charged a 2% processing fee.
Earnings of endowed funds are reduced by each fund's pro-rata share of investment costs (approximately 85 basis points annually). Generally, non-endowed funds do not earn interest and are not charged an investment fee. NOTE: All investment returns are reported net of investment costs.