Private Foundation Options
If you or your client are thinking about establishing a private foundation, but are looking for a simpler, more cost-efficient alternative, the Siouxland Community Foundation can help you analyze the pros and cons of creating a private foundation versus a Donor Advised Fund through the Community Foundation.
Donor Advised Fund
Donor Advised Funds are convenient, flexible tools for individuals, families, businesses, or groups that want to be personally involved in suggesting grant awards made possible by their gifts. Companies looking for an easier, more effective way to give back to the community can establish a Donor Advised Fund and a team of employees can meet regularly to review local needs and recommend grants. Donor Advised Funds are typically less costly and easier to administer than other forms of philanthropic giving such as family or corporate foundations. The donor or other named advisors can recommend grants to 501(c)(3) nonprofit organizations from the fund’s investment income and/or the corpus of the fund. Grants are made in the fund’s name, and the donor receives quarterly fund activity statements. The donor (if established by individuals) also has the right to name successor advisors to the fund who can recommend grants in the fund’s name after the death of the original donors.
A private foundation allows extensive donor control over distributions, board selection and investment management. However, private foundations are highly controlled by the IRS with many special restrictions and regulations, including administrative and reporting burdens, excise taxes and a required minimum payout.
Establishing a Donor Advised Fund through the Siouxland Community Foundation (SCF) can serve as a cost-effective alternative to starting up a private foundation or administering an existing one. The link below compares two approaches to giving. Establishing a Donor Advised Fund through the Siouxland Community Foundation (SCF) can serve as a cost-effective alternative to starting up a private foundation or administering an existing one.
Transferring a Private Foundation
You or your client may have an existing private foundation. In this case, we invite you to explore the benefits of transferring it to an advised fund that can be established at the Siouxland Community Foundation. Through a simple transfer process, you or your client may be able to avoid some of the hassles (and costs) of private foundation management.
Establishing a Donor Advised Fund allows you or your client to remain involved in grant making, if that is desired. At the same time, an Advised Fund will ensure that their intent, name and pattern of charitable giving is maintained—in perpetuity if so wished.
There is so much more we’d like for you to know. For more information and ideas on ways to integrate your financial planning with charitable giving, ask your financial advisor or contact the Siouxland Community Foundation.