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An independent charitable organization with governing legal documents and a governing body with complete control over investment and grant-making decisions.
Generally, start-up costs exceed $15,000, but ongoing operating, legal, and accounting costs will vary. Private foundations are subject to a 1-2% excise tax on the annual net investment income, require a 5% annual distribution of the net investment assets yearly, and must file an annual IRS Form 990-PF.
An effective option for individuals who:
Require total control over charitable activity, wish to involve family members in management of charitable assets, and are comfortable following strict compliance and granting regulations.
|Tax efficacy||Partial||Deduction based on fair market value: 30% AGI for cash gifts, 20% for securities held more than one year; not a good vehicle for the donation of appreciated securities other than publicly traded securities.|
|Cost||High||Startup and maintenance costs are extensive; PF is subject to 1-2% excise tax on annual net investment income.|
|Control||Maximum||You manage contributions, investing, and granting activity, as well as legal documents.|
|Distribution to charity||Some restrictions||Support any charitable cause subject to certain tax regulations; some foundations do not allow grants outside their mission.|
|Legacy options||Many||Succession plans can involve future generations, or remaining assets can be granted directly to a public charity.|
|Recognition v. anonymity||Not Flexible||Required to make public information about trustees or directors, certain employees, grants, income, and investments.|
Contact us to learn more about how a donor-advised fund can complement a private foundation firstname.lastname@example.org