Feature

Private Foundation

Support Foundation

Community Foundation Donor-Advised Fund

Control

Donor retains maximum control of board, investments, and grantmaking.

Donor names a minority of the board, which controls investments and grantmaking.

Donor provides advice to Community Foundation board on grants, resulting in practical, if not legal, control of grants.  Must adhere to Foundation investment policy.

Self-Dealing Rules

Strict regulations prohibit most transactions between a private foundation and its donors (including related persons or corporations).

Private foundation self-dealing rules do not apply.

Private foundation self-dealing rules do not apply.

Tax Deductibility

(AGI = Adjusted Gross Income)

Property:  20% AGI

Cash:       30% AGI

Public charity deductibility – market value

Property:  30% AGI

Cash:       50% AGI

Public charity deductibility – market value

Property:  30% AGI

Cash:       50% AGI

Excise Taxes

Excise taxes

(Section 4940-4945)

1%-2% of invest. income

Exempt from excise taxes

Exempt from excise taxes

Minimum Payout Requirement?

Yes,  5%

No

No

Investment Flexibility

Must divest excess business holdings (closely held stock) within five years or pay excise tax.

Can hold assets that do not conform to Community Foundation’s investment policy

Foundation offers donors limited number of investment strategies.

Continuity

Can continue to future generations.

Can continue to future generations.

Donor may name a successor advisor(s) to his or her fund.

Administration

Burdensome administration:

• Accounting

• Record keeping

• Tax return (form 990-PF)

Less burdensome:

• Board minutes

• Tax return (simple form 990)

Simple:

• Can establish in one day

• No separate tax returns required

Liability & Risk Insurance

Must be purchased by the private foundation.

Provided by the Community Foundation up to $10 million.

Provided by the Community Foundation up to $10 million.

Staff

Can employ family members.

Can employ family members.  Access to Community Foundation staff

Access to Community Foundation staff (for investment, grantmaking expertise).

Start-Up Costs

Legal and accounting fees.

Less than a PF.

None

Converting between entities

Can convert to a supporting foundation or donor-advised fund.

Can convert to or from a donor-advised fund, or from a private foundation.

Can convert to or from a supporting foundation, or from a private foundation.