If your client is looking for a highly personal way of giving without all the guidelines, responsibilities, and costs that come along with establishing and maintaining a private foundation, then a Donor-Advised fund at the Greater Poweshiek Community Foundation could be the right charitable vehicle for them.
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Items to Consider |
Private Foundation |
GPCF 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 |
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Ongoing costs |
Liability insurance, direct administrative costs |
Pooled administration, low costs |
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Tax Benefits |
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Cash |
Up to 30% of adjusted gross income |
Up to 50% of adjusted gross income |
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Appreciated Stock |
Up to 20% of adjusted gross income |
Up to 30% of adjusted gross income |
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Closely held stock |
Deduction limited to basis |
Deduction at fair market value |
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Excise Taxes |
Usually 2% of investment income annually |
None |
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Reporting requirements |
Annual 990-PF must be filed by foundation or hired staff |
None required of the donor. Community foundation handles all reporting. |
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Grantmaking |
Must research and identify agencies/programs to fund |
Community foundation program staff educates donors regarding worthy agencies and programs; provides information on qualified giving opportunities |
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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 grantmaking services |
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Distribution requirements |
5% annual distribution required |
None. Donors can make grant recommendations at their discretion. |
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Privacy |
Tax return is public record |
Donor may choose to remain anonymous |