Foundation Options Comparision - Community Foundation of the Great River Bend

		Advantages

		Donor Options

		Free Services

		Starting a Fund

		Private Foundation Options

	Foundation Options Comparision

	10 Reasons to Set Up a Fund

	Transferring a Private Foundation

	The Donor Advised Fund Option

	The Supporting Organization Option

Foundation Options Comparison

In the world of tax-exempt organizations, there are two basic camps: the private (or family) foundation, and the public charity. The Community Foundation of the Great River Bend has attained public charity status, and is therefore entitled to certain tax advantages not afforded to private foundations.

The Community Foundation recognizes that establishing a private foundation makes sense in many situations. However, increasing numbers of donors are finding that affiliation with CFGRB saves them time and money by reducing the administrative hassles, tax burdens, reporting requirements, and self-dealing restrictions placed on a private foundation.

The following table compares some aspects of donor advised funds and private foundations:

Donor Advised Fund at CFGRB	Private Foundation
Inexpensive and easy to establish. (Minimum $10,000 investment.)	Requires legal assistance to draft and file for IRS tax-exemption. Should have substantial assets to be economical to operate.
Funds are included as part of CFGRB’s Form 990. (No need for separate filing)	Board must file an annual tax return (990-PF).
Income tax charitable deduction: -is limited to 50% of AGI for cash -is fair market value for publicly traded stock and limited to 30% of AGI. -is appraised value for closely held stock and limited to 30% of AGI.	Income tax charitable deduction: -is limited to 30% of AGI for cash -is fair market value for publicly traded stock and limited to 20% of AGI. -is cost basis for closely held stock and limited to 20% of AGI.
Donor can recommend grant recipients and investment advisor.	Donor has complete control over the funds.
No minimum payout requirement.	Must pay out for charitable purposes at least 5% of asset value annually.
No excise taxes apply.	Is subject to excise taxes.
CFGRB handles all administrative aspects at low cost.	Administration can be costly and time-consuming for establisher.
Fund is established in a matter of days.	May take months for IRS to process application and to establish corporation or trust.
Individual donor’s fund size, gifts and grant making are kept private and confidential. No public disclosure of individual grants or donations is required. Donors are generally recognized for grants disbursed, but grants may be made anonymously. If a donor wishes, the Community Foundation can serve as the buffer between donors and grant-seekers.	Private foundations are required to file detailed tax returns on grants issued, investment fees, trustee fees, staff salaries, asset size, etc. and then publish a notice to the public that the tax return is available for public viewing. These are public records and are often compiled into grant-seeker directories for easy online access.
Advisors to funds are covered by the Community Foundation's liability and office insurance policies.	Directors and Officers liability insurance, employee bonding, and office insurance must be separately purchased.

If you or your clients have already established or are thinking of establishing a private foundation, consider the advantages of a setting up a donor advised fund at the Community Foundation of the Great River Bend. Note too, that donor advised funds may be created in addition to a private foundation, which may be advantageous from a tax perspective.