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, CAP®

    Chief Advancement Officer

    kinman@desmoinesfoundation.org

    Phone (515) 447-4207