Private versus Community Foundations
Looking for a highly personal way of giving without having to assume the responsibilities and costs that come along with establishing and maintaining a private foundation? An Amador Community Foundation Donor-Advised Fund could be the right charitable vehicle for you.
Benefits of a Community Foundation Donor-Advised Fund include:
- Maximizing your tax savings and simplifying charitable giving
- Providing access to professionals who can advise and inform on local nonprofit organizations and community needs
- Creating a fund without having to dedicate your gift to a single charitable organization or local cause
- Exposing your children or grandchildren to the joys and responsibilities of philanthropy
- Ensuring your philanthropic interests will continue in perpetuity
- Allowing you to establish a named fund or remain anonymous in your giving
Comparison - Private Foundation vs Community Foundation Donor-Advised Fund
Items to Consider | Private Foundation | Community Foundation Donor-Advised Fund |
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Setup procedure | Must incorporate and apply for IRS tax-exempt approval | Simple agreement. Can be set up in as little as one day |
Initial costs | Liability insurance, direct administrative costs | Pooled administation, low cost, no fees |
Tax Benefits
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Excise Tax | Usually 2% of investment income | None |
Reporting requirements | Annual 990-PF Must be filed by foundation or hired staff | None required of the donor. Community foundation handles all reporting. |
Grantmaking | Must research and identify agencies/programs to fund | Community foundation program staff educates donors regarding worthy agencies and programs; provides information on qualified opportunities. |
Grant management | Must ensure all recipients are qualified 501 (c) (3) organizations | Community foundation verifies organization's status, plus donors can access the community foundation's strategic grant-making services. |
Distribution requirements | 5% annual distribution required self-dealing restrictions | None. Donors can make grant recommendations a their discretion |
Privacy | Tax return is public record | Donor may choose to remain anonymous |