Points to ConsiderDonor-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 giftsUp to 50% of adjusted gross incomeUp to 30% of adjusted gross income
Income tax deductions for appreciate stock giftsFair market value up to 30% of adjusted gross incomeFair market value up to 20% adjusted gross income
Income tax deductions for real estate and closely held stock giftsFair market value up to 30% of adjusted gross incomeCost basis up to 20% of adjusted gross income
Deduction carry-over AvailableFive additional yearsFive additional years
Administrative and Grantmaking
AdministrationSimple: All record keeping and accounting carried out by CFMore burdensome: requires record keeping and filing with the IRS
Grant making expertiseCF assistance to review and monitor proposals dealing with restrictionsYour professional staff, if any (can use family members). Subject to self-review and self-monitoring
Separate annual IRS tax return requiredNoYes
ControlDesignated representatives may make recommendations but not control assets or grantsPF’s trustees retain control of board investments, grant making and reporting
Investment flexibilityCF offers investment strategiesPF’s trustees retain control of investments, but must divest closely held stock within five years
Cost
Tax on investment incomeNoneUp to 2% annually
Start-up costsNo cost to establishIncludes legal and accounting fees, staff, insurance, office space, and miscellaneous expenses
Ongoing costsModerate administrative fee depends on size and whether the fund is endowedOngoing legal and accounting fees, staff, insurance, office space and communication