Total charitable impact

 

Private foundation

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.

Criteria Characteristic Details
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 privatefoundations@vanguardcharitable.org
800-876-2106

Quick links
Pairing a private foundation and donor-advised fund