Charitable Giving Funds vs. Private Foundations

The Community Foundation provides a personal, local and flexible approach to giving. As you consider if this approach is better suited to your giving goals when compared to the establishment of a private foundation, we are here to help.

"Working with the Community Foundation gives us trusted, local expertise that allows us to stay focused on what we do best — showing up for our communities and making a difference where it matters most."

- Darren Rebelez, president and CEO of Casey’s

 

SET-UP Community Foundation
Donor Advised Fund		 Private Foundation
Start-Up Costs None. Legal, accounting & filing fees vary.
Timeframe  Immediate. Months.
Minimum Contribution  No minimum. No minimum.

 

TAXES Community Foundation
Donor Advised Fund		 Private Foundation
Cash Deduction of up to 60% adjusted gross income.  Deduction of up to 30% adjusted gross income.
Capital Gain Property
(i.e. long-term appreciated or closely held securities or real estate)		 30% of adjusted gross income. 20% of adjusted gross income. 
Excise Taxes  None.  1.39% tax on investment income.
Endow Iowa Tax Credit Eligibility  Donor-qualified funds can receive a 25% Iowa tax credit.   None. 

 

ADMINISTRATION Community Foundation
Donor Advised Fund		  Private Foundation
Administrative Services  Accounting, audit, due diligence, check writing, etc. Accounting, payroll, audit, due diligence, check writing, compliance and legal.
 Investment Options  Four portfolio options or donor may choose their own investment manager. Investment vehicles selected and overseen by the board.
 Fund Distribution  No annual minimum distribution. Annual required minimum distribution of 5% of assets.
 Fees  Fees support programs in the community. Annual legal and accounting fees, insurance, staff office space and other costs.

 

VISIBILITY Community Foundation
Donor Advised Fund		 Private Foundation
 Public Disclosure Limited public disclosure of fund. Anonymity is possible. Grant distributions must be disclosed on the IRS Form 990-PF. Asset balance is also public information.

GRANTMAKING Community Foundation
Donor Advised Fund		 Private Foundation
Future Purpose Current and future purpose defined by donor. Purpose may be changed by the board.
Community Knowledge In-depth knowledge of local nonprofits and community needs.  Responsible for assessing nonprofit and community needs.
Control  You or your fund advisors recommend grants.  Foundation board has complete control over distributions and responsibility for asset management.

 

 

 

Set-Up Community Foundation Donor Advised Fund Private Foundation
Start-Up Costs None. Legal, accounting & filing fees vary.
Timeframe Immediate.  Months.
Minimum Contribution No minimum.   No minimum. 
Taxes Community Foundation Donor Advised Fund Private Foundation
Cash Deduction of up to 60% adjusted gross income.   Deduction of up to 30% adjusted gross income.  
Capital Gain Property
(i.e. long-term appreciated or closely held securities or real estate)		 30% of adjusted gross income.  20% of adjusted gross income.
Excise Taxes None.  1.39% tax on investment income. 
Endow Iowa Tax Credit Eligibility Donor-qualified funds can receive a 25% Iowa tax credit.  None. 

 

Administration Administrative Services Investment Options Fund Distribution
Community Foundation
 Accounting, audit, due diligence, check writing, etc. (fees vary) Four portfolio options or donor may choose their own investment manager No annual minimum*
Private Foundation All costs including payroll, audit, compliance, legal, etc. are responsibility of the private foundation Investment vehicles selected and overseen by board Annual required minimum payment of 5% of assets
Commercial Gift Fund Accounting, audit, due diligence, check writing, etc. (fees vary) Multiple options, in most cases May require a minimum of 5% payout

*Endow Iowa funds are limited to a 5% maximum payout.

Visibility Public Disclosure
Community Foundation
 Limited public disclosure of fund (anonymity is possible)
Private Foundation

Grant distribution must  be disclosed on the
IRS form 990-PF
Asset balance is also public information
Commercial Gift Fund Limited public disclosure of fund (anonymity is possible)

 

Grantmaking Capabilities & Restrictions Future Purpose Community Knowledge Flexibility of Grants
Community Foundation
 Current and future purpose defined by donor Expert knowledge of local nonprofits and community needs Broad flexibility
Private Foundation Purpose may be changed by the board Responsible for assessing nonprofit and community needs Determined by board
Commercial Gift Fund Current and future purpose defined by donor Limited to no knowledge of local nonprofits and community needs Broad flexibility