The Community Foundation can work with a private foundation to alleviate administrative burdens, fully leverage tax benefits, engage family members and help achieve grantmaking priorities.

COMPARING GIVING OPTIONS
A guide to personalizing your philanthropy

COMPARING GIVING OPTIONS

Major options for giving entail varying costs and benefits. Your professional advisor can help you review options for custom giving solutions – based on your timing preferences, your giving focus and other variables.

Startup costs

Private Foundation

Typically $5,000 or more for legal and accounting expenses and filing fees.

Donor Advised Fund

None

Startup time

Private Foundation

Typically months

Donor Advised Fund

Immediate

Administrative requirements

Private Foundation

Donor is responsible for the administration including tax reporting, IRS compliance, investment of assets, grant research and record keeping, including board minutes.

Donor Advised Fund

Donor has not administration requirements. The Community Foundation handles all investment, reporting, filings, tax reporting, IRS compliance and other administrative details.

IRS Reporting

Private Foundation

Form 990-PF must be filed annually

Donor Advised Fund

No annual Form 990-PF required

Distribution requirement

Private Foundation

5% minimum annual payout required regardless of investment returns

Donor Advised Fund

None required

Charitable tax deductions

Private Foundation

Up to 30% of AGI on cash, up to 20% on appreciated stock held more than 1 year and long-term capital gain property usually deductible at cost basis

Donor Advised Fund

Up to 60% of AGI on cash, up to 30% on appreciated stock held more than 1 year and long-term capital gain property usually deductible at FMV

Excise tax

Private Foundation

Ordinarily 1-2% of annual net investment income

Donor Advised Fund

None

Operating costs and fees

Private Foundation

Typically in the range of 2%-4%

Donor Advised Fund

Generally 1.5% or less, plus investment fees

Anonymity and recognition

Private Foundation

All private foundation records are public information including grants, trustee names, expenses, etc., therefore no activity is anonymous.

Donor Advised Fund

Donor may make anonymous grants if you wish or receive recognition. All activity is confidential.

Online control

Private Foundation

Possible to create your own?

Donor Advised Fund

Already in place

Effective gift size

Private Foundation

Typically $10 million and above

Donor Advised Fund

Already in place

Grantmaking support

Private Foundation

You must arrange and support your own grantmaking and monitoring structure.

Donor Advised Fund

Professional staff is available to help identify and assess grantees, provide input on community needs, verify nonprofit status and comply with IRS regulations.