| |
DONOR
ADVISED
FUNDS
|
PRIVATE
FOUNDATIONS |
Creation
of Fund |
Established at CFSA
at no
cost to donor
|
NPO corporation
or trust independently organized as a private foundation |
Tax-exempt
status |
Shares public charity
status of the CFSA
|
Must apply for private
foundation tax exempt status from IRS |
Minimum Size |
$5,000.00 |
Substantial assets
required |
Charitable
Deductions
of Cash Gifts |
Tax deduction of
up to 50% of adjusted gross income |
Tax deduction up
to 30% of Cash Gifts of adjusted gross income |
Donor Control |
Donor holds advisory
powers over grant recommendations with final approval of the CFSA
board |
Donor retains complete
control over investments & grant making, subject to IRS requirements |
Annual Payout
Requirements |
None |
Grants must equal
5% of asset value annually |
Grant Making
Program Management |
Provided by CFSA |
Must establish and/or
obtain these services |
Annual Costs |
Minimal at 1.25%
of market value |
Include legal and
accountant fees, insurance and possibly office space, staff, and
miscellaneous expenses |
Annual Taxes |
None |
Subject to excise
tax of up to 2% of net investment gain including capital gains
|
Annual Tax
Filings
and 990 Returns |
Not required |
Must be filed with
required supporting schedules |
Investments |
Fund assets are
professionally
managed through CFSA |
Must research and
secure its own investment vehicles and investment managers |
|
Donors are informed about the variance of power requirements
and are informed about administrative fees, CFSA 5% spending policy |
|
Donors are allowed anonymity if that is their wish |
|
Donors of named funds are listed in CFSA annual reports
and other publications, unless anonymity has been requested |
|
Donors are assured that information about the size/nature
of their gift will be held in confidence |
|
Donors are allowed to select the name of the fund |
|
Donors are informed of their right to receive fund
status reports on a quarterly basis |
|
Donors of donor advised funds should understand their
right to recommend grants from the fund |
|
The issue concerning distribution of income only
or income and principal should be resolved when the fund is created |
|
The issue of the right of succeeding generations
to advise distributions from the fund should be determined at the
time the fund is created |
|
The issue of geographic constraints concerning distributions
from the fund should be determined at the time the fund is created |
|
Donors are reminded of the value of unrestricted
funds to meet unforeseen community needs and encouraged to include
the community foundation in their estate plans |
|
Donors should be fully apprised, in writing, as to
the limitations of the uses of a donor advised fund:
1. |
There cannot be benefit accruing
to the donor as the result of the distribution |
2. |
The uses of the fund must be charitable |
3. |
Donor advised funds cannot be used to fulfill
financial pledges |
4. |
All distributions must be approved by the board
of the CFSA |
|
|
CFSA staff contact donors of named funds in the form
of regular meetings |
|
There is ongoing and frequent communications concerning
the activities/grantmaking priorities and special projects of the
CFSA |
|
There is regular communication concerning unfilled
community needs, particularly to donors with advised funds |
