Perhaps your client is considering establishing a Private Foundation to facilitate charitable giving. Although Donor or Charitable Advised Funds are not the only option for your clients’ charitable giving, many of our fundholders find Donor or Charitable Advised Funds to be an attractive alternative to setting up a foundation. Compare the differences between setting up a Donor/Charitable Advised Fund and a Private Foundation:
CBCF Donor/Charitable Advised Fund | Private Foundation | |
Donor recommends grants to qualified nonprofits throughout the United States. Grants are approved by the CBCF board of directors. | Donor appoints board, which controls investments and grantmaking. | |
Public charity | Private charity | |
Cash | Up to 60% of adjusted gross income. | Up to 30% of adjusted gross income. |
Appreciated stock | Fair market value up to 30% of adjusted gross income. | Fair market value up to 20% of adjusted gross income. |
Real estate and closely held stock | Fair market value up to 30% of adjusted gross income. | Cost basis up to 20% of adjusted gross income. |
Professional staff is available to assist in identifying and assessing grantees, providing input on needs in the Coastal Bend and verifying nonprofit status of organizations. | Donors must arrange and support their Foundation’s grantmaking and monitoring structure. | |
Initial costs | None | Several thousand dollars for legal and accounting expenses, as well as filing fees. |
Minimum contribution | $10,000 for a Donor Advised Fund, $50,000 for a Charitable Advised Fund. | Typical private foundations are funded with millions of dollars. |
Ongoing costs | Donor Advised – no fee, charged investment earnings; Charitable Advised – pooled administration and annual fee. | Typically several thousand dollars for legal and accounting expenses and filing fees. |
Reporting | CBCF handles all reporting. | Annual IRS Form 990 must be filed. |