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Community Foundations |
Private/Family
Foundations |
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Establishing A Fund
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A Community Foundation
fund can be established quickly and efficiently with a
simple document. Administrative fees are 1% to 1.5% of
the fund's annual market value. |
Establishing a new
foundation requires extensive legal, accounting and
operational expenses on an on-going basis. |
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Tax Treatment of Cash Gifts |
Tax
deduction of up to 50% of Adjusted Gross Income (AGI). |
Tax
deduction of up to 30% of Adjusted Gross Income (AGI). |
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Tax Treatment of Appreciated Publicly Traded
Securities |
Tax
deduction of 100% of fair market value up to 30% of AGI. |
Tax
deduction limited to fair market value up to 20% of AGI.
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Tax Treatment of Appreciated Closely Held Stock |
Tax
deduction of 100% of fair market value up to 30% of AGI. |
Tax
deduction limited to cost basis up to 20% of AGI. |
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Tax Treatment of Real Estate Gifts |
Tax
deduction of 100% of fair market value up to 30% of AGI. |
Tax
deduction limited to cost basis up to 20% of AGI. |
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Tax Exempt Status and Required Payout |
A
Community Foundation is a 501(c)(3) public charity and
is fully tax exempt. |
Private foundations are subject to excise taxes and 5%
payout requirements. |
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Annual Tax Returns |
Individual funds are not required to file. A Community
Foundation prepares and files all tax reports to the IRS
and obtains an annual independent audit. |
Must
file annual Federal 990-PF and supporting schedules,
which indicate staff salaries, investment performance,
fees, etc. Trustees must perform, contract or hire staff
for these services. |
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Investments |
A
diversified portfolio and economies of scale offer
greater cost-efficiencies and minimize risks. A
Community Foundation works with professional money
managers. A Community Foundation's Investment Committee
provides experienced oversight. |
Selection of investment strategies and professional fund
advisors can become a very time consuming responsibility
for a private foundation's Board of Trustees. |
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Expertise |
A
Community Foundation provides expertise to donors on a
wide range of gift management, finance and fund
administration issues. |
Must
hire staff or Board members carry out administrative
tasks on their own. |
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Grant Administration |
Full-time professional staff are available to assist
donors with grant administration, research and program
evaluation to ensure maximum community impact. |
Requires extensive time to review proposals, investigate
community needs, confirm status of grantees and evaluate
previous distributions. |
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Accountability |
A
Community Foundation obtains an independent audit each
year. Publication of an annual report, public
disclosure of grants and thoughtful selection of Board
members ensures funds are used in the communities' best
interests. |
Laws
and regulations governing private foundations differ
greatly from those of public charities and may require
expensive specialized legal and finance expertise. |
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Flexibility |
As a
public charity, a Community Foundation's organizational
structure is purposely designed to allow greater
flexibility to respond to and meet emerging needs in the
community. |
Expensive and lengthy legal proceedings may be required
to change the purposes of a private foundation. |
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Privacy |
Individual donors or grants can be kept private. If the
donor wishes, the community foundation can serve as a
buffer between the donor and grantseekers. |
Required to file tax returns on donations, grants,
investment fees, staff salaries, etc. These are public
records and are compiled into grantseeker directories. |
