Community Foundation Advantage Chart

Private Foundations Donor Advised Fund at the Community Foundation of Greater Des Moines (CF) Commercial Gift Fund (CGF)

   Establishing a Fund

  • No minimum required.
  • Must secure tax exempt status using Form 1023 (may take six months or longer to process).
  • Does not qualify for Endow Iowa Tax Credits.

  • No minimum required.
  • Utilizes existing CF tax exempt status.
  • Donors to Endow Iowa qualified funds are eligible to receive a 25% Iowa tax credit in addition to normal federal deductions.
  • $5,000 - $25,000 minimum.
  • Utilizes CGF tax exempt status.
  • Does not qualify for Endow Iowa Tax Credits.

Governance

  • Independent corporation with its own Board of Directors.
  • Board maintains legal control of assets.
  • Board determines grants.
  • CF Board of Directors.
  • Assets become legal property of CF.
  • Donors recommend grants from theirfunds.
  • Board at CGF headquarters.
  • Assets become legal property of
    CGF.
  • Donors recommend grants from their
    funds.

Administration

  • Independent infrastructure created and overseen by Board.
  • All costs including payroll, audit, compliance, legal, etc. are the responsibility of the foundation.

  • CF handles accounting, audit, due diligence, checking writing, etc.
  • Tiered fee structure from 1% - .25% depending on fund size.
  • Accounting, audit, due diligence, check writing, etc. at CGF.
  • Fees vary. Range from .1% - 2.5%;
    may include additional financial
    advisor fees.

Investment

  • Investment vehicles selected and
    overseen by Board.
  • Investment management fees are responsibility of the foundation.
  • Multiple investment options, in most cases.
  • Investment management fees
    charged to the fund; cost varies depending on underlying mutual fund.
    Range .1-1.3%

  • Multiple investment options, in most
    cases.
  • Investment management fees charged to the fund; cost varies
    depending on underlying mutual fund. Range .1% - 3.25%.
 

 Funding Limits and Federal Tax Consequences

  • Cash gifts: 30% of adjusted gross
    income.
  • Capital gain property: 20% of adjusted gross income.
  • Publicly traded securities deductible at current value.
  • Illiquid assets deductible at basis.
  • 2% excise tax on investment income.
  • Cash gifts: 50% of adjusted gross income.
  • Capital gain property: 30% of adjusted gross income.
  • All capital gain property deductible at current value.
  • Illiquid assets tax deductible at current value.
  • No tax on fund's investment income.
  • Cash gifts: 50% of adjusted gross
    income.
  • Capital gain property: 30% of
    adjusted gross income.
  • All capital gain property deductible at current value.
  • Some CGFs may accept selected
    illiquid assets.
  • No tax on fund's investment income.

Visibility

  • Issues own grant guidelines and
    annual reports.
  • Desire for degree of visibility determined by Board.
  • Fund name acknowledged in grant letters (anonymity optional).
  • Limited public disclosure of fund's activities.
  • Fund listed in CF's Report to the Community and website (anonymity optional).
  • Fund name acknowledged in grant letters (anonymity optional).
  • Limited public disclosure of fund's
    activities.

Grantmaking Process

  • Subject to screening, evaluation
    and approval by Board.
  • Annual required minimum payout of
    5% of assets.
  • Foundation provides due diligence review of grantees.
  • Donor/Advisor recommends grants; approved by CF Board.
  • Does not require an annual minimum payout. Endow Iowa funds have a maximum 5% payout.
  • CF provides due diligence review of grantees recommended by donor.
  • Option to distribute grants from principal as well as income.
  • Local, personal consultants to work with donors.
  • Opportunities to partner with other donors.
  • Donor/Advisor recommends grants;
    approved by CGF.
  • May require annual minimum payout
    of 5% of assets.
  • CGF provides due diligence review of
    grantees recommended by donor.
  • Most provide option to distribute grants from principal as well as income.

 Grantmaking Capabilities and Restrictions

  • Determined by Board.
  • Purpose may be changed by future Board.
  • Foundation must determine nonprofit
    and community needs
  • Broad flexibility, including national and international charities.
  • Ultimate current and future purpose defined by donor.
  • CF has in-depth knowledge of local nonprofits and community needs.
  • Broad flexibility including national and international charities.
  • Ultimate current and future purpose
    defined by donor.
  • CGF has limited knowledge of local
    nonprofits and community needs.

For more information

Sheila Kinman, CAPĀ®

Chief Advancement Officer

kinman@desmoinesfoundation.org

Phone (515) 447-4207