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.

"The Community Foundation has the best capability to assist my family in charitable-decision making, resulting in a wonderful way to give back to the community and world."

- Jim O'Halloran

 
Set-Up Considerations Costs Time Frame Minimum Contribution
Community Foundation
 None Immediate No minimum
Private Foundation Legal, accounting & filing fees  Months No minimum
Commercial Gift Fund None  Immediate May require a minimum
Income Tax Considerations Cash Capital Gain Property Excise Taxes Endow Iowa Eligibility
Community Foundation
 Deduction of up to 60% adjusted gross income 30% of adjusted gross income None Donors to Endow Iowa qualified funds can receive a 25% Iowa tax credit in addition to normal federal deductions
Private Foundation Deduction of up to 30% adjusted gross income 20% of adjusted gross income 2% tax on investment income Does not qualify for Endow Iowa Tax Credits
Commercial Gift Fund Deduction of up to 60% adjusted gross income 30% of adjusted gross income None Does not qualify for Endow Iowa Tax Credits

 

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