Comparison Chart

Points to Consider Donor-Advised Fund at Community Foundation (CF)Private Foundation
Legal identity501(c)(3) and 509(a)(1) (public charity)501(c)(3) (private charity)
PrivacyCF can protect your identity If you likeAll information is public record
Annual payout requirementNone (monies can accumulate) annuallyGrants must equal 5% of corpus
Tax Deductions
Income tax deductions for cash gifts Up to 50% of adjusted gross income Up to 30% of adjusted gross income
Income tax deductions for appreciate stock gifts Fair market value up to 30% of adjusted gross income Fair market value up to 20% adjusted gross income
Income tax deductions for real estate and closely held stock gifts Fair market value up to 30% of adjusted gross income Cost basis up to 20% of adjusted gross income
Deduction carry-over Available Five additional years Five additional years
Administrative and Grantmaking
Administration Simple: All record keeping and accounting carried out by CF More burdensome: requires record keeping and filing with the IRS
Grant making expertise CF assistance to review and monitor proposals dealing with restrictions Your professional staff, if any (can use family members). Subject to self-review and self-monitoring
Separate annual IRS tax return required NoYes
Control Designated representatives may make recommendations but not control assets or grants PF’s trustees retain control of board investments, grant making and reporting
Investment flexibility CF offers investment strategies PF’s trustees retain control of investments, but must divest closely held stock within five years
Cost
Tax on investment income None Up to 2% annually
Start-up costs No cost to establish Includes legal and accounting fees, staff, insurance, office space, and miscellaneous expenses
Ongoing costs Moderate administrative fee depends on size and whether the fund is endowed Ongoing legal and accounting fees, staff, insurance, office space and communication